Evaluation of Canadian securities regulation: should Canada adopt the Australian ’one‐stop’ regulatory approach?
| Pages | 382-386 |
| DOI | https://doi.org/10.1108/13590790310808934 |
| Published date | 01 October 2003 |
| Date | 01 October 2003 |
| Author | David Mitchell |
| Subject Matter | Accounting & finance |
Journal of Financial Crime Ð Vol. 10 No. 4
Evaluation of Canadian Securities Regulation:
Should Canada Adopt the Australian `One-Stop'
Regulatory Approach?
David Mitchell
`ONE-STOP' SECURITIES
REGULATION IN A FEDERATION
One may argue that `one-stop' national securities
regulation in a federation of states and territories
like Australia by the federal government's Australian
Securities and Investment Commission (ASIC) is a
miracle. Given that ASIC was formed from many
smaller pre-existing state regulators and that major
legal and constitutional diculties were encountered
in its creation, it is simply amazing that Australia has
emerged with a single national securities regulator. In
direct contrast, Canada, a country quite similar in
history to Australia with regard to its federal and
provincial division of powers, its federal constitution
and legal history, trails Australia by about 30 years
with regard to its regulation of securities and ®nancial
markets.
Securities regulation in Canada is not `one-stop' in
that Canada has provincial securities markets regula-
tion, where each province has its own separate
securities commission (as Australia once did until
the creation of the original National Companies
and Securities Commission (NCSC) in 1982). In
total there are 13 separate regulators all with similar
goals and objectives.
1
Not only is this regulatory
structure inecient, but also it increases and promotes
problems for enforcement and performance of other
regulatory duties for all Canadian regulators. This
paper argues that it would be in Canada's best inter-
ests to adopt the Australian `one-stop' approach and
form one single national securities commission for
all the provinces and territories of Canada.
The purpose of this paper is to determine if Canada
can and should follow Australia in with the forma-
tion of `one-stop' securities regulation. First, the
current securities regulation in Canada will be
examined to highlight the need for change in the
present system. The possibility of creating a national
system in Canada will be investigated, and the
advantages it would bring. If a national system is
not possible in Canada, the other alternative Ð
increased coordination and harmonisation among
all Canadian provinces Ð will be discussed.
OVERVIEW OF CANADIAN
SECURITIES REGULATION
Securities regulation has largely been a product of the
late 20th century, driven by globalisation, reduction
in exchange controls and computerisation. Some of
Canada's provinces have responded rather well to
these drivers, particularly the larger ones such as
British Columbia, Alberta and Quebec, by develop-
ing well-resourced securities commissions with high
levels of requirements and disclosure. Despite the
expertise and high quality of these commissions,
however, national regulation is still segregated and
disjointed. Each commission, although having
similar goals and objectives, is an individual entity
working independently and often not in conjunction
with other fellow regulators. Furthermore, national
securities regulation does not apply nationally across
the board. Some provincial securities commissions
Ð mainly the smaller ones Ð can be contrasted to
the other advanced securities commissions, with
lesser resources and expertise suggesting that regula-
tion is less in these areas and therefore inconsistent
across Canada.
2
In an attempt to coordinate and harmonise the
regulation of the Canadian Capital Markets, the
Canadian Securities Administrators (CSA) has been
formed. It is a forum for the 13 securities regulators
of Canada's provinces and territories, yet it lacks
the regulatory and enforcement power of a national
regulator.
3
Despite the CSA's best eorts, many
problems still exist and these will be highlighted to
demonstrate the great necessity for change.
PROBLEMS WITH CANADIAN
SECURITIES REGULATION Ð THE
NEED FOR CHANGE
It is arguable that the current securities regulation
in Canada is inadequate. Even the chairman of
the British Columbia Securities Commission
(BCSC) agrees that Canadian securities regulation is
`complex, costly, impairs competition and fails to
protect investors'.
4
The following problems with
Page 382
Journal of Financial Crime
Vol.10,No. 4, 2003,pp.382 ±386
#HenryStewart Publications
ISSN 1359-0790
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