Mahsi, Mr. Chair. Mr. Chair, I am pleased to be here to talk about Bill 12, Securities Transfer Act.
The purpose of this bill is to establish a set of rules for the transfer and holding of securities, in particular the transfer of securities by electronic means across provincial, territorial and international borders consistent with the rules across North America.
Several years ago, it was recognized that Canadian law relating to the transfer and creation of interest in shares and other securities had become outdated. The law did not reflect changes in securities market practices that had occurred over the previous 25 years, particularly the holding and trading of securities electronically through multiple parties. The law was still based on a paper-based system in which a share certificate was provided to the shareholder. This was no longer the reality in the case of publicly traded securities and the result was a degree of uncertainty as to the validity of many transactions.
Securities market participants and Canadian financial services industries agreed, without exception, to the need for modern uniform legislation to improve the efficiency and legal basis of the Canadian Securities Settlement System. The Canadian Securities Settlement System handles an enormous quantity and value of transactions on a daily basis. Issuers, investors and financial institutions rely heavily on the system. It is crucial to the continual growth and competitiveness of the Canadian capital market that a system be supported by a modern legal foundation that produces predictable results, especially in a situation involving cross-border transactions.
As a result, the model on which the bill is based was developed by the Canadian Securities Administrators and the Uniform Law Conference of Canada after a period of extensive consultation with industry stakeholders. The Council of Ministers responsible for security regulations support this bill
in its effort to harmonize laws relating to securities. In the past few years, eight provinces have enacted this legislation.
This bill provides a solid legal foundation for existing practices and supports the further development of market practices in the future. While detailed rules are not directed to the general public to understand and comply with, as clients of the industry participants, the public will nevertheless be the ultimate beneficiary of this bill.
Mr. Chair, I would like to thank the Members of the Standing Committee on Social Programs for their review and comment on the bill and will be pleased to respond to any questions that committee members may have regarding Bill 12. Mahsi, Mr. Chair.