Saskatchewan, New Brunswick to join national securities regulator

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The Globe and Mail | Steven Chase | July 8, 2014

Finance minister Joe OliverTwo more provinces have agreed to join a voluntary national securities regulator expected to begin operations in the fall of 2015, bringing the total number on board to four and giving the upcoming capital markets watchdog a more pan-Canadian scope.

Sources say Saskatchewan and New Brunswick will sign on to the Cooperative Capital Markets Regulator Wednesday in a ceremony in Ottawa with federal Finance Minister Joe Oliver, embracing a plan backed by Ontario and British Columbia last September.

They join as adjustments are made to governance and operations of the new watchdog to spread out power and decision making more broadly among the provinces and assuage concerns it would be too Toronto-centric.

As they prepare for 2015, participants will try to enlist other provinces, notably Quebec and Alberta, that so far have resisted relinquishing control over capital markets within their jurisdictions.

The addition of both Saskatchewan and New Brunswick is big step forward for the regulator, despite the provinces’ relatively small capital markets presence. The success of the single watchdog rests on momentum – the idea is that once some provinces join, others will feel pressure to follow suit.

The ultimate goal is to create a common nation-wide regulator and end the patchwork of 13 provincial and territorial securities watchdogs.

As it now stands, the four provinces that have joined forces represent nearly 53 per cent of market capitalization of Canadian companies listed on the Toronto Stock Exchange and TSX Venture Exchange. The annual economic output of the financial sector in these jurisdictions represents represents two-thirds of the Canadian total.

One of the persistent provincial concerns about the new regulator is that it would be dominated by Central Canadian concerns. The executive head office is to be located in Toronto along with the chief regulator and a national management team.

Saskatchewan had earlier this year voiced that it was keen to join, so long as local concerns were addressed. While there are only a few publicly traded companies in the province, Saskatchewan Justice Minister Gordon Wyant told The Globe and Mail in May that those concerns include preserving the ability of the province’s small- and medium-sized business to raise capital from sources such as crowdfunding.

Mr. Wyant also wanted to ensure that companies and residents in Saskatchewan enjoy the same easy access to regulators they had when having capital markets regulated from Regina.

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