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CSA considers regulatory reform; Supreme Court hears challenge to proposed national regulator

by Greg Klein | March 27, 2018

Without guaranteeing results, the Canadian Securities Administrators intends to study ways to unravel some regulatory red tape. Acting on last year’s public consultations, the umbrella group for Canadian securities commissions now plans to establish working groups from its member organizations to examine a number of recommendations. Under consideration will be proposals to:

CSA considers regulatory reform Supreme Court hears challenge to national regulator

  • remove or modify the criteria for reporting issuers to file a business acquisition report

  • facilitate at-the-market offerings

  • revisit the primary business requirements to provide greater clarity to issuers preparing an IPO prospectus

  • consider a potential alternative prospectus model

  • reduce or streamline some continuous disclosure requirements

  • enhance electronic document distribution to investors

Some of the projects will take longer than others and there’s no assurance that any changes will be implemented, the CSA cautioned. But if adopted, the measures “could meaningfully reduce regulatory burden for public companies in Canada’s capital markets,” said Louis Morisset, CSA chairperson and president/CEO of l’Autorité des marchés financiers.

The proposals result from 57 letters received during a consultation period that ended last July. Among the respondents were public companies, investors, stock exchanges, law and accounting firms, industry groups and others. In some jurisdictions, securities commission staff also consulted directly with stakeholders.

Meanwhile a federal government proposal to unite the country’s commissions under a single national regulator faces a Supreme Court challenge. On March 22 a lawyer representing Quebec introduced arguments that the plan would be unconstitutional. A proposal rooted in the 1930s, given new prominence in the 1970s, rejected by the Supremes in 2011 and subject of an optimistic announcement in 2013 would supposedly have come to fruition this summer.

“The argument for a national regulator is that it will make the rules more consistent across the country, help regulators manage systemic risks, which are national in scope, and improve enforcement by making it easier to coordinate with police and prosecutors both within and outside of Canada,” according to the Globe and Mail.

“Those opposed to the plan are concerned that the move is a power grab by Ottawa, or that regulation is better done on the local level, to take into account issues specific to that region.”

Speaking to Canadian Lawyer magazine, Osgoode Hall law professor Bruce Ryder suggested judges might allow Ottawa to create a national regulator without forcing Quebec and co-opponent Alberta to join.

Inefficiencies between jurisdictions were among the reasons cited for ineffective action against investor fraud, according to recent articles by Postmedia and the Globe and Mail.

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