Canadian Cooperative Securities Regulator Gains Ground: Saskatchewan and New Brunswick join Ontario and British Columbia


On July 9, 2014, Saskatchewan and New Brunswick signed an agreement to participate with British Columbia, Ontario and the federal government to establish the Cooperative Capital Markets Regulatory System, a common, self-funded securities regulator for participating jurisdictions in Canada. Together, the four participating provinces represent approximately 55% of the Canadian market capitalization1. This new regulator is scheduled to commence operations in Fall 2015, and draft legislation relating to this regulator is expected to be published by August 29, 20142.

Proponents of the Cooperative Capital Markets Regulatory System believe that a cooperative and common system can preserve local perspectives while bringing about national reform. Proponents also believe that a cooperative system can strengthen Canada’s capital markets by providing better protection to investors, enhancing Canada’s financial services sector, managing systematic risks and having companies and governments realize cost savings.

To date, the Governments of Alberta, Manitoba, Quebec, Nova Scotia, Newfoundland & Labrador, Prince Edward Island, Yukon, Northwest Territories and Nunavut have not agreed to participate in the Cooperative Capital Markets Regulatory System. One of the challenges to establishing a single (or common) securities regulator in Canada has been convincing the various provinces and territories that their local concerns will be dealt with appropriately by a national regulator. The Supreme Court of Canada in a 2011 decision determined that unilateral action by Parliament to take over the regulation of the securities industry is unconstitutional. Accordingly, in order for a national securities regulator to be established, each province and territory will need to individually agree to participate in such an initiative.

In an effort to accommodate the participation of smaller jurisdictions in the governance structure, the agreement establishing the Cooperative Capital Markets Regulatory System provides that two additional deputy chief regulators would be established: one representing Saskatchewan, Manitoba, the Northwest Territories, Nunavut and Yukon, to the extent that they are participating jurisdictions, and another representing New Brunswick, Nova Scotia, Newfoundland & Labrador and Prince Edward Island, to the extent that they are participating jurisdictions. These would be in addition to the deputy chief regulator based in each of British Columbia and Ontario, as well as Alberta and Quebec should they choose to participate.

Click here to see the Department of Finance Canada news release.

1More Canadian Provinces join plan for national securities watchdog” dated July 9, 2014, Thomson Reuters Canada.

2 Ibid.