This week, we saw federal Finance Minister Joe Oliver announce he is resurrecting Jim Flaherty's initiative to develop a single securities regulator in Canada.
Currently, there are 13 securities commissions across the provinces and territories. Issuers of stocks and other investment vehicles needing to raise capital to make the economy grow must therefore have approval from up to 13 entities to legally market their wares everywhere in Canada.
This is the only such system in the developed world. All other countries have a national securities regulator. On the face of it, our system sounds ridiculous, but it's not as bad as it sounds.
The provincial securities commissions and the Canadian Securities Administrators (the CSA) have worked hard over the last 20 years or so to streamline this process as much as possible.
A system called NRD (the National Regulatory Database) allows a unified filing process for the registration of mutual-fund and securities salespeople, investment advisers and portfolio managers. In most cases, one commission takes responsibility for vetting and approving a registration request, and the other commissions accept their recommendation.
However, those of us who are registered in multiple provinces still know fees must be paid to each, and approvals are seldom simultaneous.
A similar co-ordinated system exists for new issues of securities, but there is still plenty of duplication and extra costs.
The single national regulator was a clear goal of the late Jim Flaherty, finance minister for the first eight years of the Harper government. The new minister has picked up the mantle, calling this initiative the Co-operative Capital Markets Regulatory System.
Joe Oliver and his officials have obviously spent time behind the scenes building consensus among the provinces. The big news in Wednesday's announcement was Saskatchewan and New Brunswick had joined Ontario and B.C. as supporters of the initiative.
The provinces not supporting the single regulator still include Manitoba, Alberta and Quebec.
This will be interesting to watch.
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Here are some corrections to a previous article. Two weeks ago, we talked about CRM2, the Client Relationship Model of improved disclosure and communication between investors and their financial advisers.
I erroneously reported the CSA had developed these rules, but the Investment Industry Regulatory Organization of Canada (IIROC) was kind enough to point out they had developed their own new rules (as had the MFDA, the other self-regulatory body), and that these new rules were only approved by the CSA.
As well, they pointed out the future performance reporting required in 2016 will require all account statements to report performance for one, three, five and 10-year periods, and since inception. I had suggested the inception reports would only be required for accounts open less than 10 years.
Finally, according to IIROC, the compensation dealers receive from selling GICs will be exempt from the requirement to disclose all forms of compensation received from the sale of other investments.
I apologize for these imprecisions.
David Christianson is a financial planner and adviser with Christianson Wealth Advisors and a vice-president with National Bank Financial Wealth Management.