Law Times

PAGE 10 FOCUS may 11/18, 2009 • Law Times OWL search… ® Is change afoot on the national regulator front? BY JULIUS MELNITZER For Law Times I n the latest of at least a half-dozen initiatives spanning four decades, the debate over the efficacy of a na- tional securities regulator is front and centre yet again. But this time the out- come may be different. "The potential for creating a national securities regulator is greater than it has ever been before," says Philip Anisman, a Toronto lawyer and securities law expert. Driving the current debate is the re- port of the Expert Panel on Securities Regulation, released in February. "The report's central theme is that Canada needs a single securities regula- tory authority with a strong, decentral- ized structure that would promote the strengths of the current system while ad- dressing its shortcomings," says Heather Zordel, a partner with Toronto's Cassels Brock & Blackwell LLP, the only lawyer appointed to the expert panel. "It recommends adoption of a com- Minimize Risk, Maximize Time You represent the vendor in the sale of a business. You represent the lender in a ®) online a full report delivered via email. Details for $49.95.* prehensive national securities act and a national regulatory system administered by a new Canadian Securities Commis- sion (CSC)," she says. The expert panel envisages that the CSC as the securities regulator for those provinces and territories who agreed to participate, but allows for opting in by other provinces from time to time. The report also says that market par- ticipants should be able to choose regu- lation by the CSC. But the report has a different focus than its predecessors. "The expert panel focuses on the need for a national securities regulator to address systemic risks in the capital markets and represent Canada on the international stage," says Philippe Tar- dif, a partner at Borden Ladner Gervais LLP's Toronto office. As Zordel sees it, the report's fo- cus on investor protections will be a driving force behind its chances for implementation. "What's truly different this time around is that the public is engaged, and there has been strong backing from investor advocates who realize that Canada is still coming to grips with a last-century issue, namely that capital markets have moved on to an interna- tional stage where regulation is debated on an international level," she says. "It's not like people still get together under a tree and exchange stock certificates." Absent a national regulator, many argue, Canada will find itself out of the global loop. "We need to implement a national Go to www.bar-ex.com or call 1-877-462-2739. regulator so that we are in a position to respond on a national basis to the new regulations that we will see coming at us from the U.S. and the U.K. in a whole range of capital markets areas," says Barry Ryan, a partner with McCa- rthy Tétrault LLP's Toronto office. "If we remain broken down into 13 little fiefdoms, our ability to customize what is required in Canada will be inhibited and hampered tremendously." The business community also appears united on the issue. "Recognition of the need for a single regulator by the whole business commu- nity — not just the securities industry — has been growing consistently over the years and has mushroomed in the last decade to the point where business is Teranet_LT_May11/18_09.indd 1 5/6/09 2:44:40 PM www.lawtimesnews.com 'The potential for creating a national securities regulator is greater than it has ever been before,' says Philip Anisman. virtually solid in the view that this makes sense," Anisman says. Even provincial politicians have been swayed. "I believe the recognition that the international nature of markets more than ever requires a national regulatory voice is what moved B.C. Premier Gor- don Campbell to agree to co-operate on this agenda," Anisman says. As well, Canada's poor domestic and international reputation for enforce- ment speaks effectively to the need for a national regulator. "To my mind, the problems can't be addressed with the current sys- tem," Zordel says. "We need to move to a common national platform for enforcement." There's also a general perception that the political will necessary to establish a national regulator now exists. "I believe that this government wants it to happen and that if it stays in power it will lay the appropriate foundation," Tardif says. Anisman is of similar mind. "The minister of Finance is more committed to a national securities regu- lator than any predecessor going back to the Trudeau government," he says. Indeed, a national regulator would fit well with the government's stated goal of encouraging the economic union of Canada. And there appears to be more sup- port from the provinces than there ever was in the past. "Historically, the Maritimes and Sas- katchewan from time to time wanted this," Anisman explains. "Ontario was not consistently in favour, but in the last decade the province has come out unequivocally in favour of a national regulator, and British Columbia has now indicated its willingness to co-operate." Alberta and Quebec, however, are still opposed, although only Quebec seems truly adamant in its opposition. So far, the federal government appears to have put its money where its mouth is. At press time, reports were circulating that an announcement from the federal government was imminent on the estab- lishment of the Transition Office set up in the budget to assist in the develop- ment of a new federal securities regime. The Budget Implementation Bill, which received royal assent on March 12, allo- cated $33 million to run the Office. See Feds, page 15 3868.BX LawTimes 04/09

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