Saskatchewan and New Brunswick yesterday joined Ontario, British Columbia and the federal government as parties to the national capital markets regulator (“CMR”) agreement in principle first signed in September 2013. As we discussed in a previous article, the proposed cooperative CMR will be responsible for policy development, regulation-making, regulatory operations and enforcement. On the same day, Alberta, Quebec and Manitoba publicly reiterated their opposition to the CMR.
CMR implementation milestones agreed have been pushed out by about six months. By August 2014, a memorandum of agreement will be entered into setting out the terms and conditions of the CMR to which draft federal and provincial legislation will be attached. By December 2014, initial draft regulations will be published and by July 2015, the legislation will be enacted. Finally, by the Fall of 2015, the CMR is set to begin operations.
With the addition of the latest two provinces, the original CMR framework was amended in several key respects intended to better accommodate some local perspectives:
- Regional Deputy Chief Regulators for Western and Atlantic Canada. The CMR will have two additional regional deputy chief regulators representing capital markets jurisdictions in Western and Atlantic Canada, who will be initially located in Saskatchewan and New Brunswick and will serve a term of five years.
- Broader Nominating Committee Representation. The nominating committees for the CMR board of directors and independent adjudicative tribunal will include representation from both major and other participating jurisdictions.
- Provincial Regulatory Office Director. Each provincial CMR regulatory office will be managed by a director who will coordinate the delivery of regulatory functions in a manner that is responsive to local needs, and will identify local issues to be considered in the development and application of national policies.
- Approval of Fundamental CMR Changes. Fundamental changes to the CMR will require unanimous approval of the Council of Ministers in the first three years of operation, and, afterwards, approval of at least two-thirds of the Council of Ministers and all major capital markets jurisdictions.
- Provincial Initiatives. The CMR will consider requests to accommodate provincial economic development initiatives that are not inconsistent with the fundamental principles of the CMR or adversely affect markets participants in other jurisdictions.
- Transition Plan. A transition plan will be developed to integrate existing securities regulatory entities into the CMR.