Donne Smith, chairman and CEO of the New Brunswick Securities Commission, today issued a statement aiming to challenge what he termed the “myths of a centralized national securities regulator”.

“Despite support from traditional centers of Canadian business, the centralized regulator concept has not taken hold and there are very good reasons why it hasn’t,” he said. “This is an important issue affecting the future of New Brunswick’s investors and capital markets. I want to challenge some of these commonly-held misconceptions.”

Smith stressed that securities regulation is a provincial, not federal government responsibility. “Proponents of a ‘single’ or centralized securities regulator argue that only such a regulator would be able to provide the efficiencies necessary to attract investors to Canadian capital markets,” Smith said. “We suggest these proponents are well-intentioned but misinformed, and unfortunately help perpetuate myths which have little or no basis in fact.”

The myths, according to Smith are:

  • Canada’s and New Brunswick’s current regulatory system is broken;
  • Canada needs a centralized national regulator to protect capital markets and investors:
  • New Brunswick’s capital markets will be better supported by a centralized regulator; and
  • New Brunswickers will have meaningful input into how a centralized regulator impacts its economic future.

Smith defended the passport system, saying, “we get all the benefits of a harmonized national regulatory system while still benefiting from a local and regional presence and influence.” He also insisted, “only a regulator headquartered in New Brunswick can truly understand the unique challenges and opportunities faced by investors and entrepreneurs in our province.”

“The debate over a centralized regulator and the myths surrounding it may continue for years to come, but in truth, provincial securities regulators have moved well beyond the criticism of those who tout the centralized vision. We in New Brunswick, along with our partners in other jurisdictions, have harmonized securities rules in the country, reduced costs, while retaining the very best consequences for our national, regional, and local capital markets. And our investors benefit too!” Smith concluded. “We should be proud of the vibrant, effective, and comprehensive securities regulatory system we have developed in Canada. Our national energies, we suggest, should be focused on making it the best in the world.”