TSE boss calls for national regulator
Urges Quebec to drop opposition: 'We cannot afford to be divided'
Sean Silcoff
Financial Post
Christinne Muschi, National Post
Barbara Stymiest, president of the Toronto Stock Exchange, told the Montreal Board of Trade that Canada "cannot afford to be fragmented by a regulatory system designed for another century."
MONTREAL - Barbara Stymiest, president of the Toronto Stock Exchange, made an appeal to Quebec yesterday to change long-held opposition to the formation of a national securities regulator.
In a speech before top business leaders at a Montreal Board of Trade luncheon, Ms. Stymiest said Canada needs to "find a workable system of securities regulation ... to put it simply, our system, with its costs and complexities, leads companies right from their first look at the Canadian market to think about why they shouldn't list in Canada rather than why they should."
Since securities regulation is under provincial jurisdiction, Canada's 10 provinces and three territories each have a regulator -- resulting in costly duplication and delays for Canadian-listed public companies.
"I simply know that we cannot stay where we are, a capital market that is small in global terms and fragmented operationally, into yet smaller parts by our Canadian regulatory system," Ms. Stymiest said.
Ms. Stymiest meets next month with regulators from across Canada and around the world at a symposium where she hopes to put "our fragmented Canadian system of securities regulation under the microscope and put on the table the range or possibilities for reform."
While she claimed yesterday to have "no preferred choice" for reforming the system, Ms. Stymiest seemed to favour a solution that would do away with the need "to do the same thing 13 different times in order to take full advantage of Canada's national market.
"We cannot afford to be divided. We cannot afford to leave ourselves in a position where we can be conquered. We cannot afford to be fragmented by a regulatory system designed for another century."
Burgundy Asset Management Ltd. president Richard Rooney, another proponent for securities regulation reform, said "in theory I'm in favour of a national securities regulator. But look at areas of federal responsibility: fisheries, the post office, the army and native peoples. I look at the way they've managed those and I'm not sure I want them in the securities industry ...
"I think it is a non-starter because the devil is in the details, and the details would have nothing to do with protecting shareholder interests and have everything to do with Canada's snakepit politics."
In addressing her remarks to Quebec decision-makers, Ms. Stymiest faced one of her toughest audiences, but not the only one. The powerful pension fund Caisse de dépôt et placement du Québec is believed to be opposed to the creation of a national regulator, as is the government of Quebec.
In fact, at next month's symposium, Carmen Crépin, chairwoman of the Quebec Securities Commission, will tell Ms. Stymiest "the point of view of Quebec remains the same," said QSC spokesman Denis Dubé. "We agree the system should be improved, but the creation of one single commission is not the solution, and we don't think it will mean reduction in delays or costs. We don't have any proof of that. For us, it's important to have the regional inputs," in securities regulation.
"We are different and we have to deal with our own differences."
Others were resigned to the fact opposition from Quebec and other provinces -- notably Alberta and B.C. -- could make reform a fruitless pursuit. As it stands, Ms. Stymiest has no jurisdiction to effect change, only, as she said, to "create the forum for debate to happen."
Montreal Exchange president and chief executive Luc Bertrand -- who sat at the head table with Ms. Stymiest -- applauded her efforts to spearhead a rethinking of securities regulation in the country.
"The reality though is it's a provincial jurisdiction. Unless there was a major reversal in the thinking at the provincial level it's hard to see how the provinces will willingly give up jurisdiction -- unless it's part of a broader discussion of constitutional responsibilities. Let's be candid here: once a province has jurisdiction in one area, will they let it go?"
Instead, Mr. Bertrand has advocated a more pragmatic approach whereby companies file regulatory documents in their home provinces and have specialized regulators in certain provinces.
"I agree it's not perfect, but it strikes me as the most perfect system within the context of our existing laws and constitution." |
