In a submission to Quebec’s Minister of Finance and members of the Commission des Finances publiques, the Quebec Securities Commission indicates its cautious support for the creation of a single super-regulator in that province.

QSC chair Carmen Crepin says that the commission “shares and supports the core principles set out in the [Martineau] report.” It says that it supports facilitating access by consumers and reducing the administrative burden imposed upon issuers and financial intermediaries. However, it says, “As regards issuers and financial intermediaries, we must qualify our support, particularly in light of the events which have taken place in the capital markets over the last few months. It would not be an exaggeration to say that the global capital markets, including those in Québec, are currently facing a major credibility problem.”

“Maintaining — some would say re-establishing — this trust requires, among other things, a rigorous regulatory structure,” she says. “The desire to lighten the regulatory burden should not lead to decreased vigilance, reduced requirements or a decreased ability to police the markets.”

Crepin also raises several issues that she says should be important considerations in the creation of the new agency. It is primarily important that it have credibility in the eyes of both domestic and foreign market participants, she says. “This credibility will depend upon the image presented by the Agency as regards its independence, impartiality and governance as well as its ability to assume its responsibilities effectively and efficiently.”

She suggests that the agency’s power should not be concentrated. “Concentrating all the powers in the hands of only one person who will be responsible for administering the Agency and will exercise all of its decision-making powers at first instance places that person in a situation in which there will be a constant appearance of conflicts of interest and recurring doubts regarding that person¹s impartiality.”

In an accompanying discussion paper, the QSC also calls for more time to implement changes. “Providing a 12-month period for the completion of the proposed merger is certainly insufficient,” it says. “While it is undoubtedly necessary to provide for effective leadership during the transition period in order to avoid useless delays, it is equally important, that we ‘make haste slowly’.”

“Although an undertaking of this scope should not be unduly drawn out, it must also not be rushed, lest Québec¹s capital markets, its firms, its financial products and services sector and its entire economy suffer significantly.”

http://www.QSC.com/en/publi/Pre.Comfinpub13aout2002.pdf