In his speech at the IFIC conference in Toronto this morning, David Brown, chair of the Ontario Securities Commission, argued the case for bringing some of the Sarbanes-Oxley reforms to the Canadian markets.

Brown said that the bill doesn’t just change the law in the U.S. “It changes the dynamic for markets around the world.” He added that the reforms are too big for Canadians to ignore.

Brown called the bill “the most dramatic upheaval in securities regulation since the creation of the Securities and Exchange Commission in the 1930s”.

He went on to detail recent reforms in Canada, but said that Canadians cannot afford to ignore Sarbanes-Oxley, for three reasons: the Canadian and U.S. economies are interdependent; any jurisdiction’s ability to attract capital depends upon its ability to inspire confidence in its markets; and, many of its reforms make as much sense for Canada as they do for the United States.

Brown said it’s easy to find arguments against introducing reforms to our markets, as B.C. regulators have done. “But it would be a mistake to allow ourselves to be swayed by them.”

Brown said the OSC is examining U.S. measures that have potential relevance to Canadian markets such a asthe Sarbanes-Oxley Act, the new corporate governance requirements adopted by the New York Stock Exchange, and the NASDAQ listing rules.

He allowed that it could also be a mistake to think that U.S. reforms can simply bed grafted on to a Canadian market. Some are simply not relevant, and some are not appropriate to our market structure.

Brown stressed that “Our working principle will be to harmonize with the U.S. initiatives we are reviewing unless there is a compelling reason not to. We are open to any reasonable argument against any specific measure; but the burden of argument is on those who are opposed to any reform.”

He said that the OSC has already begun the consultation process.

“I am confident that we can bring our regulatory framework forward to meet the new challenge to confidence. I am confident that public companies, their officers and their directors will get the message. I am confident that investors too will get the message – the message that there are protections in place and those protections are being beefed-up expeditiously and enforced vigorously,” he concluded.