The governments of Canada, Ontario and British Columbia announced that they have entered into an agreement to create a "cooperative capital markets regulatory system," and they invite all provinces and territories to participate in the proposed system. This agreement follows the December 2011 decision of the Supreme Court of Canada which held that the federal government could not create a national securities regulator without provincial consent and cooperation.
Pursuant to an agreement in principle, Ontario and British Columbia will adopt uniform legislation which will address all matters of provincial jurisdiction over securities regulation. As well, the Government of Canada will implement legislation which addresses criminal law matters and issues relating to systemic risk in Canada's capital markets.
A single capital markets regulatory authority (the "CMR") with a board of directors, a regulatory office and an adjudicative tribunal will administer the legislation and regulations implemented by the participating provinces and the federal government, as well as carry out all regulatory, enforcement and adjudicative functions. The CMR will also have responsibility and authority to identify and manage systemic risk and will represent Canada internationally in matters of capital markets regulation.
The CMR will be overseen by a board of directors, consisting of 9-12 members, all of whom will be independent. The board will be comprised of individuals with Canadian and international capital and venture markets experience, and will be broadly representative of Canada's regions. The Chief Regulator will serve as chief executive officer of the CMR and, with advice and assistance from their recommended deputies and a nationally integrated staff, will carry out the day-to-day management functions of the CMR.
A council of ministers consisting of the ministers responsible for capital markets regulation in each participating jurisdiction and the Minister of Finance of Canada will (on the recommendation of a nominating committee) appoint members of the board of directors and the adjudicative tribunal, provide oversight on regulatory policy, review reports of the board, propose amendments to provincial legislation, approve regulations, and make requests to the board that specific regulations be implemented, subject to the board's consultation and approval processes.
The CMR's executive head office will be located in Toronto. Additional regulatory offices will be located in each participating province, with the goal of having a regulatory office in each of Vancouver, Calgary, Regina, Winnipeg, Toronto, Saint John, Halifax, Charlottetown and St. John's, assuming that each province chooses to participate in the proposed regulatory system.
The full agreement can be found here.
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