Mahsi, Mr.
Chair. I'm
pleased to appear before the committee today to review Bill 7, a new Securities Act.
The present Securities Act is outdated and inadequate to address the many changes that have occurred — particularly in recent years — in the capital markets and the regulation of those markets in Canada since it was enacted.
The lack of harmonized legislation has been identified as a significant weakness in the current regulation of securities trading in Canada.
Cross-border trading in securities is now the rule rather than the exception. Securities legislation that is not uniform or harmonized leads to inefficiencies in the raising of capital, and inconsistent and unequal protection for investors.
In 2004 an inter-provincial Memorandum of Understanding was developed with a goal of improving securities regulations in Canada.
The MOU established a Council of Ministers responsible for securities regulations and identified several key objectives, the most important of which are:
•
the implementation of a passport system,
where an issuer or a registrant need only deal with the primary regulator and comply with the laws of that regulator’s jurisdiction in order to operate in any or all other provinces and territories; and
•
the harmonization of securities legislation, in particular to improve enforcement, investor protection and inter-jurisdictional cooperation.
The Council of Ministers identified a wide range of recommended changes to securities legislation to support the passport system and to strengthen the coordinated national system of regulation in Canada. As the scope of these amendments grew, it became clear that it would be easier to accommodate these improvements within a new act, rather than in an amendment to the current legislation.
Officials in Prince Edward Island, Nunavut and Yukon drew the same conclusion in respect of their legislation. This led to the idea that the four jurisdictions should join forces to develop a uniform-model act that would include all of the measures proposed by the Council of Ministers that are suitable for smaller Canadian jurisdictions.
They began with model legislation that had been developed by the securities regulators from all of the provinces and territories and that had been completed in 2003. The Council of Ministers Task Force supported them in their work. A request for public comments on a Northwest Territories version of the model was circulated last fall. P.E.I. and Yukon did likewise with their versions.
Few comments were expected, given the objective is harmonization with laws already applicable to the industry in other jurisdictions. There were several minor suggestions, all of which were addressed in the bill.
A new act has now been enacted in P.E.I. and Yukon. In Nunavut a bill to enact the model is at a second reading.
The purpose of securities legislation is to facilitate the raising of capital in the private sector while providing appropriate protections and remedies for investors. A new Securities Act would not necessarily promote capital investment in the Northwest Territories, but it would remove obstacles that arise from legislation that is outdated and out of step with legislation elsewhere in Canada.
Most importantly, this bill includes new and significantly improved enforcement and investor protection measures in line with those that have been recently enacted in many provinces.
Mr.
Chair, I would like to thank the Standing
Committee on Social Programs for its review of this bill. Mahsi, Mr. Chair.