The newly appointed Minister of Finance recently affirmed the federal government’s support of a cooperative national securities regulator. Minister Morneau noted that the federal government’s message “to all provinces is [that] we respect their decisions and we will work together with the provinces that are willing to form a collaborative capital markets regulator.”

This expression of support came shortly after the deadline for submitting public comments on the revised consultation draft of the provincial Capital Markets Act and the accompanying draft regulations. At least fifty comment letters were submitted by various industry groups, businesses, and law firms. Some letters focused on particular aspects, while other comment letters provided a more complete overview.

Osler’s Comment Letter can be accessed here: Osler Comment Letter. We support the concepts underlying the cooperative system, but our letter highlights several issues that we believe need to be addressed. In our view, it would be advantageous for market participants and their legal advisors to have a greater engagement with the legislative drafters. To that end, Osler suggested the establishment of an advisory body made up of knowledgeable legal experts to assist with the development and implementation of the legal framework for the cooperative system.

The cooperative system contemplates that the Capital Markets Act and the regulations would be implemented in each of the participating provinces and territories. This legislation, together with the Federal government’s anticipated legislative portion, would be administered by the Capital Markets Regulatory Authority, a single regulator accountable to the legislative bodies of participating jurisdictions and subject to oversight from a council of ministers. Currently, as we have previously posted, British Columbia, Ontario, Saskatchewan, New Brunswick, Prince Edward Island and the Yukon have committed to working together to establish a cooperative capital markets regulatory regime which will hopefully lead, eventually, to a national system.

We will continue to monitor developments regarding this initiative. We view Minister Morneau’s expression of support as an important step, and hope that the participating jurisdictions will continue to consult with market participants to address the important outstanding issues and move this initiative forward.