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News Release
Attention News, Business and Assignment Editors:
A new model for a single Canadian securities regulator
proposed
Crawford Panel on a Single Canadian Securities Regulator issues
its final report calling for the creation of a Canadian Securities Commission
TORONTO, June 7 – The Crawford Panel on a Single Canadian
Securities Regulator today released its final report titled A Blueprint for a Canadian Securities Commission.
The final report incorporates input received from consultations earlier this year with market participants,
regulators and government representatives. The report recommends a practical structural solution that addresses
the weaknesses inherent in the current multi-jurisdictional system of securities regulation in Canada.
“Our model is based on the desire to position Canada as the best
place in the world to invest and raise money for businesses of all sizes, to demonstrate leadership through
innovative and cost-effective responses to the needs of capital market participants, and to enforce the rights of
investors on a consistent, tough and fair basis throughout Canada,” said Purdy Crawford, panel chair. “With a
single Canadian securities regulator in place, Canada’s competitive position in the global capital markets will
improve. Entrepreneurship and innovation, especially by small and medium-sized enterprises, will be enhanced, and
investors will be confident in investing their money in the Canadian capital markets.”
The Panel’s final report recommends that all provinces and the
federal government work together to create a single Canadian securities regulator with checks and balances, to
prevent any one jurisdiction from dominating. It defers some decisions, such as the location and role of the head
office and regional offices, to the board of directors of the Canadian Securities Commission and recommends that
regional centres of excellence be established across the country.
The proposed model calls for a Council of Ministers to provide
political oversight of capital markets regulation; an independent board of directors to provide governance
oversight, selected and elected through an arm’s length process; and the appointment of a chief commissioner who
would select and lead the management team of the Canadian Securities Commission. A separate Canadian Securities
Tribunal would conduct hearings into regulatory violations.
Under the Panel’s proposed framework for a Canadian Securities
Commission, a single Canadian securities act and rules would apply and be interpreted consistently across all
participating jurisdictions. This would reduce compliance costs for issuers, create certainty for capital market
participants, assure investors that Canada is an attractive and safe place in which to invest capital, and ensure
that enforcement investigations and proceedings are conducted efficiently and predictably. Regulatory rules
developed in the future would be principles based, written in plain language and user-friendly, to give Canadian
capital markets global advantages.
“A key outcome of our proposed model is that a single regulator can
consistently enforce investor rights across Canada,” said Crawford. “Consistent enforcement of investor rights is
important to investors who have different degrees of protection depending on where they live.”
The Panel recommends that jurisdictions prepared to participate, or
who are considering participating, in a single securities regulator take the following steps as soon as possible:
- Establish a small task force to write a Canadian securities act and to identify the current national and
multilateral instruments that will be adopted as rules
- Establish a nominating committee that should immediately begin identifying candidates for the board of
directors and the positions of non-executive chair of the board, chief commissioner and chief adjudicator, and
- Negotiate a memorandum of understanding, including reaching agreement about compensation for loss of
revenue to some participating jurisdictions and developing a transition protocol.
Market participants the Panel consulted expressed concern about the risk of one jurisdiction dominating a
Canadian Securities Commission and whether the single regulatory model adds significant value beyond the current
Principal Regulator or “passport” system.
“We believe we have addressed these concerns,” said Crawford. “While
the passport system will not achieve all of the benefits of a single regulator, it is an important initiative
that should be permitted to reach its full potential while interested jurisdictions work toward the establishment
of the Canadian Securities Commission (CSC). Most roundtable participants do not view the passport system and our
proposed Canadian Securities Commission as diametrically opposed alternatives. A consistent view we heard was
that the groundwork needed to establish the CSC should occur contemporaneously with Ontario joining the passport
system.”
Canada is currently the only major country in the world without a
single securities regulator. Domestic and foreign investors perceive Canada’s current fragmented regulatory
system as an embarrassment.
“After 40 years of discussion and study, market participants that we
consulted hope that our political leaders will finally find a way to agree that a single regulator can ensure
more efficient and competitive capital markets for the benefit of all Canadians.”
A copy of the final report, discussion paper, and background
material is available on the panel’s website at www.crawfordpanel.ca. A
replay of the news conference held today, is available until July 7, 2006 at 416-640-1917 or 1-877-289-8525, pass
code for English: 21191732#, pass code for French: 21191734#.
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Media contact:
Deb Trouten
416-485-2412, 416-574-8031 (wireless)
detrouten@dakota-comm.com
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