The chairman of the Ontario Securities Commission today issued an open letter to market participants which outlines the OSC’s approach for addressing issues raised by recent changes to U.S. securities legislation and exchange listing requirements.

David Brown calls for a balanced response to the Sarbanes-Oxley Act that “provides protection to investors without unduly compromising the efficiency of our capital markets.”

“We believe that Canadian market issues demand made-in-Canada solutions,” Brown states, noting that in some cases — such as the Canadian requirement for immediate disclosure of material changes — Canadian regulations are more robust than new requirements introduced in the U.S.

“In other cases, we may find that differences in market structure make a measure inappropriate in Canada, or demand a different tool to address a specific policy goal,” he adds.

However, Brown noted the importance of harmonizing Canadian securities laws with the U.S. regime in order to promote domestic and foreign investor confidence, attract capital to Canadian markets and preserve access to U.S. markets for Canadian public companies.

“Our approach to reviewing these initiatives is based on the assumption that it makes regulatory sense to harmonize with the U.S. initiatives unless there are cogent reasons for not doing so,” he states.

The OSC also made public letters sent by Brown to the Canadian Institute of Chartered Accountants and the Law Society of Upper Canada which seek their views on the impact of the Sarbanes-Oxley Act on the accounting and legal professions. The two letters are similar to recent letters sent by Brown to the TSX and the ten largest securities dealers in Canada seeking their advice and views on crafting a Canadian response to U.S. developments.