Perhaps the most significant recommendation coming out of the Draft Report of the Five Year Review Committee released Wednesday is the call for a national securities regulator, but the committee also called for numerous other major changes among its 85 recommendations.

Along with national securities regulation, the draft report on securities laws in Ontario also calls on the Canadian Securities Administrators and government to adopt a system of harmonized functional regulation across Canada, with a single market conduct regulator and a single prudential regulator.

The report also recommends splitting the Investment Dealers Association into a self-regulating organization and a trade association.

In the meantime, the report suggested that the existing rules should be overhauled. It calls for the Ontario Securities Commission to get “basket” rulemaking authority, and to speed up rulemaking by cutting comment periods, rule republications and ministerial approval time.

At the same time, the report says that the OSC should focus its efforts, take on fewer projects and justify its initiatives on a cost-benefit basis.

For issuers, the report recommends that the CSA permit both foreign and Canadian companies to prepare their financial statements in accordance with U.S. generally approved accounting principles; and that the GAAP exemption for banks be removed. It also supports the move to focus on continuous disclosure, and to create a statutory civil liability regime for continuous disclosure.

For mutual funds, the report says the CSA should introduce a requirement for all publicly offered mutual funds to establish an independent governance body which would have the right to terminate the mutual fund manager.

On the enforcement front, the report calls for the OSC to get the power to impose fines of up to $1 million per contravention of Ontario securities law. The OSC should be granted the power to require disgorging of profits.

The report also recommends creating a national dispute resolution system and ultimately consolidating the complaint-handling and dispute resolution systems.