Expert Panel on Securities Regulation in Canada Releases Final Report

    VANCOUVER, January 12 /CNW Telbec/ - The Expert Panel on Securities
Regulation, chaired by the Honourable Tom Hockin, P.C., today submitted its
final report, including a draft Securities Act, to the Government of Canada.
    The report reflects the findings of a ten-month work effort by the Expert
Panel on how to improve the structure, content, and enforcement of securities
regulation in Canada. The Expert Panel consulted with many Canadians, engaged
experts domestically and internationally, and commissioned a series of
research studies.
    The report puts forward recommendations that would address many of the
shortcomings of the current system of securities regulation while preserving
its strengths.
    The central recommendation is the establishment of a single securities
regulator administering a single securities act for Canada. The Expert Panel's
recommended structure would provide clearer national accountability, reduce
overlap and duplication, strengthen enforcement, and better serve the needs of
investors. It would also maintain the high level of local service currently
being provided and continue to meet the distinct needs of regional markets.
    "We recognize and applaud the progress made by the provinces and
territories over recent years to better coordinate and harmonize Canadian
securities regulation, through initiatives like the passport system. However,
the recent turmoil in capital markets has made it even clearer that Canada
needs a single securities regulator that can move with greater speed alongside
other domestic and international regulators to address financial instability,"
said Mr. Hockin.
    "Canada's fragmented system of 13 regulators, none of whom are
accountable for the stability of our national markets, is a serious
shortcoming in Canada's system of financial regulation. We will be much better
positioned to collaborate and advocate domestically and internationally with a
single securities regulator."
    A key issue for the Expert Panel was recognizing that previous studies
had made similar recommendations for a single regulatory authority but without
any visible sign of progress.
    "Under the terms of our mandate, we were asked to provide a transition
path to move Canada from where it is to where it must be. We recommend the
provinces and territories willingly adopt a comprehensive securities act that
would establish a single securities regulator for Canada. We believe the
prevailing global financial environment makes a compelling case for doing so.
If, after a reasonable period of time, a sufficient number of provinces and
territories do not participate, we recommend the federal government proceed to
offer market participants-issuers and registrants-the opportunity to join the
new single national regime directly. Market participants have overwhelmingly
supported the idea of a single regulator and this would provide them the
opportunity and benefit of doing so."

    The report and draft Securities Act make a number of other
recommendations to improve securities regulation. These include:

    - Establishing a single, comprehensive system to measure the performance
      of securities regulation in Canada to promote greater accountability;
    - Advancing a more principles-based approach to securities regulation to
      reduce unnecessary compliance costs, strengthen enforcement actions,
      and give Canada a competitive advantage;
    - Creating a small reporting issuer panel to examine opportunities on an
      ongoing basis to streamline reporting requirements and reduce
      compliance costs for small public companies in Canada;
    - Exploring opportunities to further develop risk-based securities
      regulation and tailor regulation to the size of public companies in
      Canada and the sector they operate in;
    - Promoting fairness in the adjudication of regulatory matters by
      establishing an independent adjudicative tribunal; and
    - Establishing an investor panel and an investor compensation fund to
      better serve the needs of investors in securities regulation.

    "The content of securities regulation was an important area that we
examined. We believe that there are areas where Canadian securities regulators
have fallen behind international best practices. There are other areas where
they could be more innovative and consultative, to better serve Canadians."
    The report was transmitted to the Minister of Finance, on behalf of the
Government of Canada. It was also provided to the provincial and territorial
Ministers responsible for securities regulation.
    Mr. Hockin was joined on the Expert Panel by Ian D. Bruce, CEO, Peters &
Co. Limited; Denis Desautels, former Auditor General of Canada; Hal Kvisle,
President and CEO, TransCanada Corporation; Dawn Russell, Q.C., Purdy Crawford
Chair in Business Law, Dalhousie University; Terry Salman, President and CEO,
Salman Partners Inc.; and Heather Zordel, Partner, Cassels Brock & Blackwell
    The mandate of the Expert Panel is attached. The complete version of the
report together with the draft Securities Act, research studies, and
additional information on the Expert Panel, are available at

             Mandate of the Expert Panel on Securities Regulation

    The Expert Panel on Securities Regulation will provide advice and
recommendations to the Minister of Finance and the provincial and territorial
Ministers responsible for securities regulation on the following:

    1) The objectives, outcomes, and performance measures that will best
       anchor securities regulation and the pursuit of a Canadian advantage
       in global capital markets.

    2) How Canada could best promote and advance proportionate, more
       principles-based securities regulation, starting from existing
       harmonized legislation and national and multilateral regulatory
       instruments, with a view to creating a Canadian advantage in global
       capital markets.

    3) How proportionate, more principles-based regulation could facilitate
       and be reinforced by better and more coordinated enforcement, which
       could include a separate securities tribunal.

    4) How this approach to regulation could be implemented under a passport
       system or under a common securities regulator.

    5) A model common securities act and a transition path, including key
       steps and timelines, that participating provinces and territories
       could adopt to effect proposed changes to the content, structure, and
       enforcement of regulation.

    The Expert Panel will draw on global best practices and build on the
strengths of Canada's capital markets. It will also review efforts to date to
harmonize and simplify Canada's regulatory system.
    The proposals of the Expert Panel will be respectful of the
jurisdictional framework for securities regulation in Canada and will allow
willing participation of provinces and territories.

For further information:

For further information: George Bentley Expert Panel, Secretariat, (613)

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