At the fifth annual Western Canadian Securities Forum in Calgary Monday, Alberta Securities Commission chairman, Stephen Sibold, reiterated his call for two-tier securities regulation in Canada.

Sibold scoffed at the latest calls for a national securities commission. “While this issue is certainly not a new one (having first been raised seriously in 1935), it is one which merits serious consideration and debate. What is very disappointing, though, is that the proponents of a national commission have relied largely on rhetoric rather than facts and analysis to advance their case. You may be familiar with some of these claims.”

“Last week, I was bemused to read in the papers that the answer to the loss of Canadian head offices as a result of foreign take-overs was — you guessed it — a national securities commission,” said Sibold. “The problem that I have with these arguments is that they ignore the facts.”

The facts, Sibold argued, are:

  • Most provincial governments view securities regulation as a means of generating revenue for their provincial coffers;
  • Canada’s system of securities regulation is not the laughing stock of the global markets that proponents of the national commission insist it is; and
  • The U.S. system is not the model of efficiency and simplicity it is often made out to be.

Sibold said regulators will be failing issuers if they allow globalization to “become the mantra of our system of regulation.” Canada needs a system of regulation that recognizes the needs of senior and junior issuers, and one that recognizes the national and regional scope of our capital markets, he added.

“Clearly, our mantra should be proportionate or ‘two-tiered’ regulation,” he noted. “By proportionate regulation, I mean regulation that is tailored to the realities of the issuer and the market in which it operates. In other words, a theory of regulation that is based on the facts.”

“We need a regulatory system which can accommodate both the regional and bi-polar nature of Canada’s capital markets. We can no longer continue with a ‘one-size fits all’ approach to regulation with the U.S. system used as the model to follow,” Sibold concluded.