A committee appointed by the Ontario Minister of Finance says the province should assume a leadership role in working to resolve any remaining barriers to a single securities regulator responsible for Canada’s capital markets activity.

The Draft Report of the Five Year Review Committee also recommends improvements to securities legislation, and rincreased enforcement powers for the Ontario Securities Commission.

“We make wide-ranging recommendations for Ontario’s securities regulatory framework,” says Purdy Crawford, hair of the committee. “In particular, we join the many regulators, politicians, securities firms and investors who have called for a single, co-ordinated approach to securities regulation in Canada.”

As well, the committee recommends improvements to financial reporting and disclosure by public companies, and improvements to Ontario securities legislation to allow regulations to be timely and balanced.

The committee is also calling for more effective enforcement powers to be made available to the OSC and the courts. It says the OSC should be given the ability to levy administrative penalties and impose sanctions against market participants in a broader range of roles within the securities industry. As well, courts should be given the ability to impose longer jail terms. The committee also recommends new laws to fight fraud and market manipulation.

Other key areas on which the committee makes recommendations include:

    The need for a regulatory regime in Ontario that is harmonized nationally and internationally to the greatest extent possible, so as to make Ontario capital markets an attractive centre for both issuers and investors;

  • The need for securities legislation to adapt to an increasingly technology-driven environment;
  • Improved regulation of market participants including registrants, self-regulating organizations and mutual fund organizations;
  • Extending liability for disclosure by public companies to purchasers in the secondary market, and a corresponding change to the rules governing which purchasers may sue an insider for illegal insider trading; and
  • Enhancing fundamental shareholder rights.

    “Some of the measures we propose are housekeeping changes to update requirements while some are intended to streamline the regulatory burden. Others are more far-reaching in their potential impact,” said Mr. Crawford.

    The Securities Amendment Act, 1994, requires the Ontario government to appoint a committee to review the legislation, regulations and rules relating to matters dealt with by the OSC every five years. The Minister of Finance’s Five Year Review Committee was formed in March 2000. The report issued today solicits public comment on the issues considered and on the committee’s recommendations. Comments will be accepted until August 15.