Stephen Sibold, chairman of the Alberta Securities Commission, called for a two-tier regulatory system for Canada at an Insight Mergers & Acquisitions conference.

Sibold suggested that it makes little sense to compare the Canadian system with the United States. “Over 95% of our listed companies are regional or, at best, national in scope. They simply neither need, nor can afford, a regulatory system which assumes that they are a large multinational issuer. In essence, I believe that we need to consider a two tiered regulatory system, which imposes two very different regimes. For the bulk of our listed companies, the system would be streamlined, less complex and less costly to comply with than the current regime.”

For the big issuers, Sibold suggests that compliance with the SEC rules could be considered to be compliance with the Canadian rules. “We do not need to duplicate the U.S. system for less than 5% of our issuers who are large enough to be able to afford it. Let’s face the facts, Toronto is not New York. The Canadian capital market is, in reality, a junior capital market in the global context. Rather than trying to deny this fact, we should embrace it and devise a regulatory regime which reflects the realities.”

Tackling the question of a single, national regulator, Sibold suggested that the view from Bay Street is pretty straight forward, “form a national commission, locate it in Toronto and just get on with it.” However, he said, “the view from the regional capital markets is, I suggest, quite a bit different. Instead of ignoring or denying regionalism, we should embrace it as a unique feature of our form of federalism.”

“We have to give some serious thought to the question of whether issues that are so crucial to Alberta would be given the same prominence by a single national commission headquartered in the environs of Bay Street.”

Sibold dismissed the idea of the pan-Canadian Securities Commission, as proposed by OSC chair David Brown, suggesting that the only way to have one regulator is to have a national regulator formed by the federal government. Although, the prospects for that are not good, he predicted.