| Improving
Securities Regulation in Canada
Provincial and Territorial Ministers responsible for securities regulation are committed to making improvements to the Canadian securities regulatory framework.
All provinces and territories, except Ontario, signed the 2004 Provincial/Territorial
Memorandum of Understanding Regarding Securities Regulation (MOU). Ministers from British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, Yukon and Nunavut are members of the Council of Ministers of Securities Regulation (the passport jurisdictions).
The MOU recognizes that securities regulation in Canada is a matter of provincial jurisdiction, and that the securities regulatory system requires constant innovation and reform to keep pace with the evolution of capital markets. The Council of Ministers is committed to maintaining and enhancing the status of Canada’s securities regulatory system, which is already ranked by the Organisation for Economic Co-operation and Development and the World Bank Group as one of the best in the world.
One of the key objectives of the 2004 MOU was to establish a passport system providing market participants with a single window of access to Canadian capital markets. The passport system—essentially a free trade agreement based on mutual recognition of regulatory systems—is a major step in improving Canada’s regulatory system.
Phase one of the passport system was implemented by regulators through a rule (Multilateral Instrument 11-101 Principal Regulator System) and related rule and policy changes in September 2005, but its scope was limited by a lack of harmonized legislation. Since 2005, the passport jurisdictions have implemented harmonized, streamlined securities legislation (entirely new Securities Acts in several jurisdictions) designed to support phase two of the passport system, and to complement uniform instruments being developed by the Canadian Securities Administrators.
Phase two of the passport system is already in effect for issuers, beginning March 17, 2008, with the implementation of Multilateral Instrument 11-102 Passport System, National Instrument 41-101 General Prospectus Requirements and Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids. Phase two of the passport system will be fully implemented by mid-2009 with the implementation of National Instrument 31-103 Registration Requirements. On February 29, 2008, the Canadian Securities Administrators republished for comment proposed National Instrument 31-103, with the comment period expiring May 29, 2008.
Phase two of the passport system will allow participants to clear a prospectus, register as a dealer or adviser, or obtain a discretionary exemption from their principal regulator (i.e. regulator in their home province or territory) and have that decision automatically apply in all other passport jurisdictions. Phase two also ensures public companies are subject to only one set of harmonized continuous disclosure requirements in passport jurisdictions.
The Council of Ministers’ goal is to develop a provincial/territorial framework that inspires investor confidence and supports competitiveness, innovation and growth through efficient, streamlined and cost-effective securities regulation that is highly harmonized and simple to use for investors and other market participants.
The Council of Ministers oversees implementation of the commitments in the MOU and explores options for further reform. Ministers and securities regulators are committed to working together on an ongoing basis to ensure that the highest standards of investor protection are effectively and consistently applied.
For additional information regarding recent and future securities-related reform initiatives, please refer to the Council of Ministers' 2007 Annual Progress Report.
Government
of Quebec • Government of Nova Scotia • Government
of New Brunswick • Government of Manitoba • Government
of British Columbia • Government of Prince Edward Island
• Government of Saskatchewan • Government of Alberta
• Government of Newfoundland & Labrador •
Government of the Northwest Territories • Government
of Yukon • Government of Nunavut |
