CFA Societies Canada and the Portfolio Management Association of Canada (PMAC) penned a letter to the Canadian Securities Administrators (CSA) last month, calling for a more harmonized approach to securities regulation across the country. In it, the trade groups laid out five recommended initiatives designed to make Canada a better place for companies to raise capital, and for investors to put their assets to work.
The letter calls for a CSA vision statement on harmonization, greater transparency into the regulatory differences between jurisdictions, a plan to turn Multilateral Instruments into National Instruments, a thorough review of local rules and model regulation development.
The time is right. In a throne speech delivered to Parliament on May 27, King Charles reiterated the federal government’s plan to table legislation removing federal barriers to internal trade and labour mobility by Canada Day. The same political will that makes that feasible — a result of hostile U.S. trade policy and unartfully phrased rhetoric — demands a fresh look at securities regulation.
Almost no one thought we’d see this up for discussion again so soon after the Capital Markets Authority Implementation Office announced it would “pause” its work on the launch of a national capital markets regulatory authority in 2021. Still, real harmonization looks doable.
“Timing is everything,” Katie Walmsley, president of PMAC, said. “In our discussions across Canada, with the heads of some of the commissions, there’s a lot of renewed enthusiasm.”
Walmsley cosigned the letter with Michael Thom, CFA’s managing director.
“Nobody is blind to the political considerations around this right now,” Thom said.
This is a pivotal moment for Canada. Global investors are watching closely to see how we navigate this shift away from our long-standing alignment with the U.S. Business leaders want to know that we’re still a safe bet.
Progress on securities regulation, alongside a boost in cross-Canada trade and increased military spending will send a clear signal about our new place in the global economy.
CFA Societies Canada and PMAC deserve congratulations for their consultative approach. There’s nothing in this document that will come as a surprise to CSA. (The organization did not respond to our request for an interview.)
To be clear, this is a call for harmonization, not a national securities regulator.
“We’re not trying to get any regulators amalgamated,” Thom said. “We’re not trying to change anybody’s jobs. We’re just saying, ‘Isn’t there a better way to produce regulation?’”
This article appears in the June issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.
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