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	<title>IGOPPNational securities regulator &#8211; IGOPP</title>
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		<title>Securities regulator to review share sale plans in wake of Bombardier controversy</title>
		<link>https://igopp.org/en/securities-regulator-to-review-share-sale-plans-in-wake-of-bombardier-controversy/</link>
		<comments>https://igopp.org/en/securities-regulator-to-review-share-sale-plans-in-wake-of-bombardier-controversy/#respond</comments>
		<pubDate>Thu, 24 Oct 2019 20:36:42 +0000</pubDate>
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				<category><![CDATA[IGOPP in the Medias]]></category>
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		<category><![CDATA[National securities regulator]]></category>
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		<category><![CDATA[Shareholders]]></category>

		<guid isPermaLink="false">https://igopp.org/?p=12003/</guid>
		<description><![CDATA[Canada’s securities regulators are launching a review of automatic share sale programs after controversial trading last year at Bombardier Inc. led to calls for reform by investor rights advocates. The Canadian Securities Administrators (CSA), an umbrella organization for provincial securities watchdogs, said on Thursday it will examine whether automatic securities disposition plans place “appropriate constraints” [&#8230;]]]></description>
		<content><![CDATA[Canada’s securities regulators are launching a review of automatic share sale programs after controversial trading last year at Bombardier Inc. led to calls for reform by investor rights advocates.
The Canadian Securities Administrators (CSA), an umbrella organization for provincial securities watchdogs, said on Thursday it will examine whether automatic securities disposition plans place “appropriate constraints” on the trading activities of senior executives and other insiders, and whether the rules governing them should be changed and harmonized across the country.
“The CSA’s review aims to ensure that [such plans] remain a legitimate mechanism of trading by corporate insiders and do not undermine the fairness of our capital markets,” Louis Morisset, CSA chairman and president of Quebec’s Autorité des marchés financiers, said in a statement.
Automatic share sales plans allow senior executives to exercise options and sell stock without running afoul of Canadian insider-trading regulations, which forbid them to trade shares while they have material information that has not been disclosed to shareholders. The trades are to be made according to prearranged instructions given to arms-length brokers, who carry out the transactions following agreed-on parameters on things such as price and volume limits without any further influence from the executives.
The benefit of such plans is that they allow executives and other participants to cash in some of their equity compensation and sell a portion of their stock without having to do it during open trading windows under the company’s insider-trading or black-out policies.
Insider trading rules usually require securities trades by insiders to be reported within five days. But companies that establish automatic share sales plans can seek an exemption from their provincial regulator that allows them to report all such sales just once a year.
[ ... ]
Quebec’s securities regulator launched a probe and cleared the company of wrongdoing in April of this year, but recommended Bombardier consider scrapping the arrangement.



Bombardier voluntarily ended the program shortly afterward. The company has said the plan was created at a time when trading was permitted under its internal guidelines and under applicable securities laws.



Insider trading filings reviewed by The Globe and Mail earlier this year show that 52 per cent of the shares Bombardier chief executive officer Alain Bellemare put into the company’s 24-month share disposition plan were sold during the first two months of trading. He had total gains of $10.6-million on the transactions.
Considering that Mr. Bellemare’s shares were sold at an average price of $4.55, and Bombardier’s share price was as low as $1.67 after the restructuring was publicly disclosed, “there is an appearance of prejudice to the balance of the shareholders,” said the Canadian Foundation for Advancement of Investors Rights (FAIR), an advocacy group. This undermines investor confidence in the company, the market and the regulators, FAIR said.
[ ... ]
Michel Magnan, a business professor at Concordia University, said in a recent interview that the reporting exemptions are problematic, and the optics of the share disposition programs are not consistent with modern governance.
Ms. Keleman said securities regulators are unlikely to approve new exemption requests until the review is complete. She said companies can still set up new plans, but insider trading reports will have to be filed within five days.
Such exemptions, while not requested by all issuers setting up the plans, have been granted several times over the past decade, the CSA said.
Yvan Allaire of the Montreal-based Institute for Governance of Private and Public Organizations, said the CSA review is “timely and critical," and without changes, more controversies similar to the one that hit Bombardier are possible.
"There is a likelihood of controversy in all cases if the stock price drops some time after the beginning of the trading period,” he said.
Read more [1]

[1] https://igopp.org/wp-content/uploads/2019/10/Nicolas-Van-Praet_Securities-regulator-to-review-share-sale-plans-in-wake-of-Bombardier-controversy-The-Globe-and-Mail_October-2019.pdf]]></content>
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		<item>
		<title>The bizarre case of a “national securities regulator”</title>
		<link>https://igopp.org/en/the-bizarre-case-of-a-national-securities-regulator/</link>
		<comments>https://igopp.org/en/the-bizarre-case-of-a-national-securities-regulator/#respond</comments>
		<pubDate>Wed, 09 Jul 2014 17:59:08 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[News Articles]]></category>
		<category><![CDATA[National securities regulator]]></category>
		<category><![CDATA[Regulation]]></category>

		<guid isPermaLink="false">http://igopp.org/?p=3282</guid>
		<description><![CDATA[So a couple of additional provinces might sign up for Ottawa’s deal to create some sort of centralized securities regulator. Ottawa just won’t let go of this foolish idea. Having been rebuked by the Supreme Court, having been shown that all the claims made to justify a “national”security commissions were bogus, the federal government is [&#8230;]]]></description>
		<content><![CDATA[So a couple of additional provinces might sign up for Ottawa’s deal to create some sort of centralized securities regulator.

Ottawa just won’t let go of this foolish idea. Having been rebuked by the Supreme Court, having been shown that all the claims made to justify a “national”security commissions were bogus, the federal government is now trying to wiggle back in through a small window left unsecured by the Supreme Court’s judgment.

So, let’s not call this thing “A National Securities Commission» but rather “A Cooperative Capital Markets Regulator” (CCMR) and let’s pretend that the provinces will enact a “provincial” legislation as long as there is a single, uniform one for all provinces! The federal government will produce a “complementary federal legislation” on criminal matters, systemic risk, etc. which will be enforced even in provinces that have not joined the CCMR.

Then, a memorandum of agreement will be signed by all parties essentially creating the centralized administrative structure of a “national securities regulator”.

“Regional” offices”, led by a deputy chief regulator under the authority of the central office, will provide the range of services that provincial securities commissions now provide. This sort of centralization becomes acceptable because some provinces are willing to delegate to a central entity a jurisdiction which is theirs, as confirmed by the Supreme Court of Canada.

Now, in January 2014, a press release was issued informing us that BC, Ontario and the federal government were making great progress in getting their ducks aligned; it was foreseen that a draft provincial law, the federal complementary law and the memorandum of agreement would all be ready by April 30th 2014 and the draft regulations by June 30th. All these dates have passed without anyone, outside inner circles, getting a peek at these draft documents. But, some provinces, it appears, are ready to sign on this deal, documents unseen.

Other than Ontario, which has been forever salivating for a “national regulator” located in Toronto to seal its position as the single financial center in Canada, it is difficult to understand why other provinces would jump aboard this ship. Perhaps, it is a case of the carrot and stick of the federal government in action.

Somewhere, somehow, the provincial ministers of finance of Alberta, Manitoba and Quebec will again have to make the case for provincial jurisdiction, forcefully, persuasively. They must plead with their colleague ministers of finance for more deliberation on their part; they must convey to them that this is a subject of great substantive and symbolic significance. For Quebec, this action by the federal government with the complicity of some provinces smacks of a minor Meech Lake fiasco!

(Opinions expressed herein are strictly those of the author).
]]></content>
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		<item>
		<title>Systemic federal risk :</title>
		<link>https://igopp.org/en/systemic-federal-risk/</link>
		<comments>https://igopp.org/en/systemic-federal-risk/#respond</comments>
		<pubDate>Wed, 09 Oct 2013 17:56:41 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[News Articles]]></category>
		<category><![CDATA[Financial crisis]]></category>
		<category><![CDATA[National securities regulator]]></category>
		<category><![CDATA[Risk management]]></category>

		<guid isPermaLink="false">http://aimta712.org/?p=1800</guid>
		<description><![CDATA[The federal minister of finance is wrong to think a national securities commission would lower risk. Give the federal minister of finance his due: He is nothing if not persistent. Rebuffed by the Supreme Court of Canada in a unanimous and blunt judgment, the minister is trying to squeeze a national securities commission through the [&#8230;]]]></description>
		<content><![CDATA[The federal minister of finance is wrong to think a national securities commission would lower risk.

Give the federal minister of finance his due: He is nothing if not persistent. Rebuffed by the Supreme Court of Canada in a unanimous and blunt judgment, the minister is trying to squeeze a national securities commission through the small openings contained, as a sort of consolation prize, in the Supreme Court’s decision:

“While the proposed Act must be found ultra vires Parliament’s general trade and commerce power, a cooperative approach that permits a scheme that recognizes the essentially provincial nature of securities regulation while allowing Parliament to deal with genuinely national concerns remains available…

However, as important as the preservation of capital markets and the maintenance of Canada’s financial stability are, they do not justify a wholesale takeover of the regulation of the securities industry which is the ultimate consequence of the proposed federal legislation. The need to prevent and respond to systemic risk may support federal legislation pertaining to the national problem raised by this phenomenon, but it does not alter the basic nature of securities regulation which, as shown, remains primarily focused on local concerns of protecting investors and ensuring the fairness of the markets through regulation of participants.”

(Judgment of the Supreme Court, December 2011; emphasis added)

The federal minister of finance has thus embarked on a campaign to woo the provinces with trinkets and baubles of “cooperative federalism.” Ontario, which needed no persuasion as it has been drooling for a long time to become the home of a central, national securities commission, and British Columbia have jumped on the federal bandwagon. Other provinces are more reticent and may wave the train by. Certainly Quebec and Alberta, the formidable challengers of the last federal initiative, remain doggedly opposed to, and unimpressed with, this new variant.

But, why does the federal government manifest such determination to having it its way, to impose some central organization to oversee the securities business?

Let’s put aside any political motive that twisted minds might conjure up and suppose rather that the federal minister of finance is truly worried about the heightened systemic risk to the Canadian financial system brought on by our fragmented, provincially based securities commissions.

Is he right to fear that without a central coordinating body regulating securities, Canada could be handicapped in dealing with a systemic financial crisis of the sort the world experienced in 2008.

The answer is a simple and categorical no!

"Canada has no need of any ‘central’ securities commission"

The last financial crisis, the most lethal we have experienced since 1929, provided an eloquent demonstration: The countries with centralized securities commissions, such as the Unites States and Great Britain, were the most affected by the crisis. At no time did the crisis threaten the Canadian financial system; the only event that had a whiff of what was happening elsewhere occurred with respect to asset-backed commercial papers (the famous ABCP); but at no time did that unfortunate episode pose a systemic risk for Canada.

In fact, the six large Canadian banks represent the true systemic risk to our financial system; the size of their assets, the diversity of their operations and the linkages among them put the whole system at risk should one of them falter. However, these banks come wholly under federal jurisdiction. The Office of the Superintendent of Financial Institutions (OSFI) and the Bank of Canada wield the power and authority to impose all precautionary measures on these banks. In March 2013, under the terms of the Basel Accords, the OSFI formally decreed that the six Canadian banks were systemically important financial institutions (SIFI). As a result, these banks must submit to a set of measures (enhanced capital ratios, etc.) designed for worldwide institutions that have been so labeled.

Over-the-counter (OTC) derivatives, opaque and poorly regulated, played an important systemic role in triggering the last financial crisis. Remember AIG and its virtual insolvency resulting from its massive involvement in credit derivatives. The astronomical volume and transnational character of these OTC derivatives could once again create havoc for the international financial system. What should Canada do about these lethal derivatives? Does the absence of a “national” securities commission inhibit efforts to deal with this systemic problem?

Well, a little known instance, the Heads of Agencies (HoA), dealt with the issue swiftly, cooperatively and effectively. The HoA, under the leadership of the Governor of the Bank of Canada, brings together OSFI and the heads of the securities commissions of Alberta, B.C., Ontario and Quebec, to discuss and take actions on matters of national importance. The HoA has been tasked to implement all measures recommended by the G20 to which Canada has committed.

Canada now has a framework to enhance the transparency and international regulation of derivative instruments, a framework developed through a cooperative process, without the need of any “central” securities commission.

The federal minister of finance, once again, is basing his initiative on arguments that are unfounded in fact or in theory. Canadian systemic risk comes above all from the major universal banks, a sector wholly under federal jurisdiction.

As for other risks, the framework put in place to regulate over-the-counter derivatives provides a fine demonstration that the present system works well.

The burden of proof that the present system increases systemic risk in Canada falls squarely on the minister’s shoulders. It is a burden he has failed to discharge thus far.
]]></content>
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		<item>
		<title>Counterpoint : Taming hostile takeovers</title>
		<link>https://igopp.org/en/counterpoint-taming-hostile-takeovers-2/</link>
		<comments>https://igopp.org/en/counterpoint-taming-hostile-takeovers-2/#respond</comments>
		<pubDate>Tue, 25 Jun 2013 18:19:16 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[News Articles]]></category>
		<category><![CDATA[American governance]]></category>
		<category><![CDATA[Hostile takeovers]]></category>
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		<guid isPermaLink="false">http://aimta712.org/?p=1812</guid>
		<description><![CDATA[The time has come to modernize the obsolete regulations of takeovers in Canada. What’s wrong with the current system of regulations of hostile takeovers put in place in 1986 by the Canadian securities commissions? Well, it is quaint, distorting…and illegal. For instance, empirical results provide clear evidence that the changes in U.S. state laws to [&#8230;]]]></description>
		<content><![CDATA[The time has come to modernize the obsolete regulations of takeovers in Canada.

What’s wrong with the current system of regulations of hostile takeovers put in place in 1986 by the Canadian securities commissions? Well, it is quaint, distorting…and illegal.

For instance, empirical results provide clear evidence that the changes in U.S. state laws to increase the power of boards to “just say no” to takeovers have indeed led to far fewer hostile takeovers; but the rate of successful takeovers actually increased and shareholders received a substantially better offer for their shares. In the U.S., boards of directors with enhanced powers have extracted much better deals for their shareholders.

Take the recent case of Inmet Mining Corp. and First Quantum Minerals. Inmet’s board was dead set against a takeover by First Quantum. The latter made a bid; no other bidder has shown up. Despite the board’s opposition, Quantum simply put its offer to the shareholders. As enough of them handed in their shares the deal has been done; the takeover was successful. Under Canadian regulations, the board of Inmet had no other recourse; it believed that it was not in the long-term interest of Inmet to be acquired by Quantum at the offered price but were powerless to act. That does not make any sense.

Strangely, almost at the same time U.S. states were acting to place legal hurdles in the path of hostile takeovers, Canadian securities commissions were adopting (in 1986) rules to make hostile takeover operations easier to carry out successfully. Foremost among the reasons given for this Canadian initiative was the “protection of the bona-fide interests of the shareholders of the target company…The take-over bid provisions…should leave the shareholders of the target company free to make a fully informed decision.”

It was a strongly-held belief of regulators and a premise of the 1986 regulation adopted by the Canadian securities commissions that management was always in conflict of interest when faced with a bid for its company. Another argument invoked in 1986 assumed the appropriate regulatory approach to takeover bids is to encourage unrestricted auctions.

Whatever dubious merit there might have been to this back in 1986 (and empirical evidence does raise doubts), it now smacks of a time and circumstance that have passed on.

The time has come to modernize the obsolete regulations of takeovers in Canada. The provincial securities commissions, coordinated through the Canadian Securities Administrators, must bring forth a framework for takeover regulation that is sensitive to the realities of contemporary financial markets and complies with Canadian laws and jurisprudence as well.

 	Canadian corporate governance already incorporates what activist investors are fighting for in the United States; elimination of staggered boards and separation of power between the chair of the board and the CEO, both governance principles which make it easier to carry out a hostile takeover. Combined with the widespread practice of majority voting for board members, these features of Canadian corporate governance provide shareholders with the means and tools to punish an errant board.
 	The changes in shareholding since 1987 have been remarkable; as soon as a takeover offer is made public, the financial calculus of present shareholders coupled with the actions of specialized funds transform radically and swiftly the shareholder base of the target company. To consider these new shareholders as the “owners” of the corporation, the sole “deciders” of its fate, needing the benevolent protection of securities commissions against malevolent, conflicted management, seems like an imaginative scenario of times past.
 	The regulations adopted by securities commissions in 1986 are remarkably disrespectful of the Canadian Business Corporation Act and Supreme court jurisprudence. It is time that the CSA aligns its regulations with Canadian law; securities commissions cannot thwart the authority and responsibility of directors to act in the long-term interest of the corporation. Takeovers represent the quintessential decision about the long-term interest of the corporation and of all its stakeholders.
 	The notion that unrestricted auctions for companies are the best system flies in the face of the Canadian business context. There is rarely an abundance of credible bidders for a particular company. The board needs to be able to bargain for a higher price.
 	The quaint notion that management is, ipso facto, against the takeover of their company because of inherent conflicts of interest must be updated. Because of the changes in compensation system for executives and board members, the concern has become that management and boards may be too receptive to a takeover offer that may not be in the interest of the corporation and its stakeholders. The potential conflict of interest has switched side. Securities commissions should be alert to the appearance of that phenomenon and assess measures to limit this sort of conflict of interest.

It is urgent that the Canadian Securities Administrators adopt proposals that bring takeover regulations in line with 21st century financial markets.
]]></content>
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		</item>
		<item>
		<title>Doing Business With Qc Inc.</title>
		<link>https://igopp.org/en/essai-video/</link>
		<comments>https://igopp.org/en/essai-video/#respond</comments>
		<pubDate>Tue, 07 Aug 2012 19:47:48 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[Videos ]]></category>
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		<guid isPermaLink="false">http://aimta712.org/?p=2810</guid>
		<description><![CDATA[]]></description>
		<content><![CDATA[
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		<title>IGOPP&#8217;s Position paper National securities commission</title>
		<link>https://igopp.org/en/igopp-files-paper-on-the-proposed-national-securities-commission/</link>
		<comments>https://igopp.org/en/igopp-files-paper-on-the-proposed-national-securities-commission/#respond</comments>
		<pubDate>Fri, 18 Mar 2011 18:49:52 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[Press Releases]]></category>
		<category><![CDATA[National securities regulator]]></category>
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		<guid isPermaLink="false">http://aimta712.org/?p=1459</guid>
		<description><![CDATA[Last May, Canada’s Minister of Finance Jim Flaherty tabled a bill that aimed to replace the 13 provincial and territorial securities commissions with a national one. The government immediately submitted its proposal to the Supreme Court of Canada, to get an opinion on its constitutionality. The IGPPO deposited a position paper to draw the court’s [&#8230;]]]></description>
		<content><![CDATA[Last May, Canada’s Minister of Finance Jim Flaherty tabled a bill that aimed to replace the 13 provincial and territorial securities commissions with a national one. The government immediately submitted its proposal to the Supreme Court of Canada, to get an opinion on its constitutionality.

The IGPPO deposited a position paper to draw the court’s attention to the absence of any factual basis for claims regarding the efficiency and effectiveness of centralized securities industry regulation.

There are no existing studies that show that communications within a federal regulator’s various offices would be more efficient than communications between provincial regulators and the Canadian Securities Administrators (CSA) in the existing passport system.

As an Institute dedicated to the research and distribution of governance related information, the IGPPO believes that the court should respond to the question that was asked of it, by basing itself on modern governance principals related to complex organizations, and by adopting an evidence-based methodology, rather than relying on suppositions or conjectures regarding the merits of centralization.
]]></content>
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		</item>
		<item>
		<title>No one (in Ottawa) would listen!</title>
		<link>https://igopp.org/en/no-one-in-ottawa-would-listen-the-strange-obsession-with-a-national-securities-commission-2/</link>
		<comments>https://igopp.org/en/no-one-in-ottawa-would-listen-the-strange-obsession-with-a-national-securities-commission-2/#respond</comments>
		<pubDate>Mon, 28 Feb 2011 19:56:52 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[News Articles]]></category>
		<category><![CDATA[Financial crisis]]></category>
		<category><![CDATA[National securities regulator]]></category>
		<category><![CDATA[Securities and Exchange Commission]]></category>

		<guid isPermaLink="false">http://aimta712.org/?p=3010</guid>
		<description><![CDATA[Of all the convoluted arguments marshaled to support the case for a centralized, national securities commission, none is more shop-worn than pointing to the shining example of the American Securities and Exchange Commission (SEC). Clearly, it is asserted with a booming voice, modern financial markets require tightly coordinated regulations and enforcement, which only a single, [&#8230;]]]></description>
		<content><![CDATA[Of all the convoluted arguments marshaled to support the case for a centralized, national securities commission, none is more shop-worn than pointing to the shining example of the American Securities and Exchange Commission (SEC).

Clearly, it is asserted with a booming voice, modern financial markets require tightly coordinated regulations and enforcement, which only a single, centralized agency can provide. Canada, they continue, is sadly unique in the world with its Province-based and decentralized regulatory system. Canada is also a rare country to have weathered the financial hurricane of 2008 relatively unscathed!

Superior coordination and enforcement??

If anyone persists in claiming superior virtues for a centralized regulatory system à la SEC, let them read (actually force them to read) Harry Markopolos’s true financial thriller “No one would listen” (Wiley, 2010). Markopolos is, of course, the whistle-blower who vainly tried to get the SEC to investigate Bernie Madoff from 2000 until the eventual collapse of his Ponzi scheme in December 2008 as a result not of any action taken by the SEC but of the stock market crash.

Markopolos tells a frightening tale of incompetence, indifference and arrogance at the SEC. What’s most relevant to our federal attempt to install a centralized regulator with regional offices is the impotence and frustration of the SEC’s Boston office, to which Markopolos reported his findings on Madoff’s scheme.

Markopolos writes: “The New England region extended south only as far as Greenwich, Connecticut. Even if [the Boston office] had wanted to, it would not have been permitted to send an investigative team into New York City. Once you crossed into New York State, you had to deal with the New York regional office. And […] the two offices were extremely competitive; there was not a lot of respect in either office for the other one. […] the chances of the New York office warmly embracing a case handed to them by the Boston office were somewhat limited”

So much for the benefits of superior coordination and seamless operations that will flow naturally from a centralized Canadian securities commission!

Anyone who has studied organizations knows that branches, regional offices, divisions of the same organization are not more likely to cooperate with each other than with outside entities.

Indeed, a study sponsored by the Hockin Expert Panel to assess the causes of the ABCP issue and whether a centralized regulatory system would have prevented the problem states: The ABCP crisis turns out to be a poor test with respect to arguments in favor of greater consolidation of regulatory responsibility… The case for consolidation would be strengthened if there is evidence that communication between different parts of a single agency proves more effective than communication among agencies. (Chant, 2008, p.46) [...] Read more [1]

[1] http://igopp.org/wp-content/uploads/2014/05/Yvan_Allaire-No_one_in_Ottawa_would_listen-long-2.pdf]]></content>
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		</item>
		<item>
		<title>The tired and tiresome arguments for a national securities commission</title>
		<link>https://igopp.org/en/the-tired-and-tiresome-arguments-for-a-national-securities-commission-2/</link>
		<comments>https://igopp.org/en/the-tired-and-tiresome-arguments-for-a-national-securities-commission-2/#respond</comments>
		<pubDate>Fri, 10 Dec 2010 23:52:02 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[News Articles]]></category>
		<category><![CDATA[National securities regulator]]></category>
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		<guid isPermaLink="false">http://igopp.org/?p=3555</guid>
		<description><![CDATA[In the Globe and Mail of December 1st, Mr. Monahan states boldly, peremptorily, that “The policy case for a single national regulator is surely overwhelming”. But it is not, far from it. His first argument, if that is what it is, has to do with the issuance of shares in all parts of Canada. Mr. [&#8230;]]]></description>
		<content><![CDATA[In the Globe and Mail of December 1st, Mr. Monahan states boldly, peremptorily, that “The policy case for a single national regulator is surely overwhelming”. But it is not, far from it.

His first argument, if that is what it is, has to do with the issuance of shares in all parts of Canada. Mr. Monahan seems to imply that an issuer in Canada has the burden of dealing with 13 securities commissions. Has he heard of the passport system whereby filing with the securities commission of the province where the company is domiciled is equivalent to filing with all jurisdictions? Of course, the system would work even better if Ontario agreed to participate fully, but some arrangements are in place to minimize the cost and impact of Ontario’s limited participation in the passport system.

A second, related, point has become the favourite cliché in this debate. Other countries have a single regulator; Canada still suffers from a fragmented system and, thus, is not well represented in international forums such as the International Organization of Securities Commissions (IOSCO). This is “embarrassing” to Mr. Monahan.

Has he   heard of the Canadian Securities Administrators (CSA), an effective body where national policies are reviewed, discussed, and adopted? At IOSCO, Canada has two voices (Quebec and Ontario) but a single position, adopted at the CSA and defended as a Canadian position. Indeed, Quebec even sits on the executive committee of IOSCO. Does he think that, with a “national” commission, some super federal civil servant”, head of this commission, could take policy positions at international forums in the name of Canada without extensive consultation with “regional” stakeholders? The CSA does that more effectively.

Because shares are traded across Canadian provincial boundaries, Mr. Monahan claims that a central, national, commission is required. Then, let’s be consistent; because shares are traded in large volumes across national boundaries, Mr. Monahan should argue for a single international securities commission, located in London or Berlin or Hong Kong. Why not call immediately for a single securities commission for the 27 countries of the European Union instead of the European Securities Committee (ESC), the equivalent of our CSA? Brussels commissars would applaud loudly this suggestion. IOSCO and ESC, coordinating mechanisms for national commissions, seems quite capable of doing at the vast international level what, in Mr. Monahan’s view, CSA cannot do for Canada.

With this Canadian arrangement made up of a passport system and a CSA as a coordinating mechanism, we have the best of all possible worlds: an efficient, cost-effective system, sensitive to regional differences and needs, adapting swiftly to emerging issues, articulating and defending Canada’s position with a single voice in international forums.

The fact is that Canada is respected and given high marks by all international organizations (the OECD, the World Bank, the World Economic Forum) which assess countries for the effectiveness of their securities system, their corporate governance and the protection of minority shareholders. The fact that Canada outclasses most countries with centralized securities commissions or matches the best of them does not give pause to proponents of the “national” commission. The fact is that Canada has weathered the worst financial crisis in 80 years with little damage. Who can say the same for countries with wonderfully centralized securities commissions?

Some people in and around Ottawa want to repair a system that isn’t broken.
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		<title>Obsessing about a national securities commission</title>
		<link>https://igopp.org/en/obsessing-about-a-national-securities-commission-2/</link>
		<comments>https://igopp.org/en/obsessing-about-a-national-securities-commission-2/#respond</comments>
		<pubDate>Tue, 01 Jun 2010 23:19:45 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[News Articles]]></category>
		<category><![CDATA[National securities regulator]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[Securities and Exchange Commission]]></category>

		<guid isPermaLink="false">http://igopp.org/?p=3545</guid>
		<description><![CDATA[(This comment reflects the opinion of the author and not necessarily that of the Institute or of its board of directors) It is curious, even strange, to hear the federal finance minister on May 26th 2010 repeat, like a well-trained parrot, the same lame arguments about why Canada must have a single, national, securities commission. [&#8230;]]]></description>
		<content><![CDATA[(This comment reflects the opinion of the author and not necessarily that of the Institute or of its board of directors)

It is curious, even strange, to hear the federal finance minister on May 26th 2010 repeat, like a well-trained parrot, the same lame arguments about why Canada must have a single, national, securities commission. The French version of the argument was even more pathetic.

Let’s single out some pearls of tortured logic.

“A national commission will result in cost savings for the benefit of issuers”; but the new system will call for a new national super-structure; yet there should not be any staff reduction in the personnel of provincial commissions (who, in participating provinces, will become (better paid?) federal civil servants)!

“Canada is the only country member of the OECD which does not have a national securities commission”; but as Terence Corcoran wrote in the Financial Post on May 26th “Canada is the only developed country without a national regulator and the only country not to be burned by the global financial crisis, therefore Canada will create a national regulator. Doesn't work as a logical syllogism.” Canada indeed fared best when most everywhere else their financial system was going over the cliff!

“Canada is an international laughing stock with its 13 jurisdictions”; but international organizations, far from laughing at Canada, regularly rank our country among the best for its corporate governance and the protection of investors! For instance, in an OECD report, Canada came in 2nd for the quality of overall securities regulation ahead of the USA (4th) and the UK (5th). The World Bank ranked Canada in 5th place for investor protection, again ahead of the United States (7th) and the United Kingdom (9th).

“A single national regulator will do a better job of enforcing the law and prosecuting criminals”; but the federal government is already responsible for the legal framework governing the prosecution of criminal cases, a framework that differs radically from the American system of justice; furthermore, the evidence is mounting that efforts at centralized investigation and litigation have been disappointing; moreover, the track record of “national” securities commission in other countries provides very tepid support for centralized arrangements. It is instructive and discomforting to read how the Boston office of the SEC had tried, in vain, for several years to bring the Washington SEC enforcement authorities to look into Bernard Madoff’s affairs; so much for the superior coordination of a centralized organization.

“A national securities commission will result in simpler, more effective processes for investors”; again the bugaboo of 13 jurisdictions is trotted out; there is a wilful ignorance of the effective coordination that has been put in place by provincial securities commission (with Ontario opting out!), that a single filing is required to satisfy the requirements, that a recent, little known invention, called the Internet, has made filing and reporting a simple, inexpensive process. [...] Read more [1]

[1] http://igopp.org/wp-content/uploads/2014/09/2010-06-17-Allaire-National-Post-Obsessing-about-a-national-securities-commission-final.pdf]]></content>
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		<title>A national securities commission:</title>
		<link>https://igopp.org/en/a-national-securities-commission/</link>
		<comments>https://igopp.org/en/a-national-securities-commission/#respond</comments>
		<pubDate>Fri, 30 Jan 2009 23:28:18 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[News Articles]]></category>
		<category><![CDATA[National securities regulator]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[Shareholders]]></category>

		<guid isPermaLink="false">http://igopp.org/?p=3582</guid>
		<description><![CDATA[Finance Minister Jim Flaherty&#8217;s obsession with creating a national securities commission is becoming clearer. On Tuesday evening, he revealed the cost of the new federal infrastructure project he wishes to roll out, which comes to $154 million for 2009-2010 alone (as indicated on page 102 of the budget speech). We understand Mr. Flaherty&#8217;s commitment to [&#8230;]]]></description>
		<content><![CDATA[Finance Minister Jim Flaherty's obsession with creating a national securities commission is becoming clearer. On Tuesday evening, he revealed the cost of the new federal infrastructure project he wishes to roll out, which comes to $154 million for 2009-2010 alone (as indicated on page 102 of the budget speech).

We understand Mr. Flaherty's commitment to spending in order to boost the Canadian economy, but this $154 million to create a national commission seriously undermines the argument that a single regulatory agency would be more cost-effective than the current structure.

This expenditure would be a mere drop in the bucket, however, if it became necessary for all of the organizations regulated by such a national, federal body to ensure that Canadian investors had access to financial information in both official languages.

Indeed the Hockin Report proposes that any publicly traded company could opt to be regulated by the federal, or national, securities commission rather than by the securities commission of the province where the company keeps its legal residence. Does that mean that this federal or national commission would have to require all publicly traded companies to communicate with their investors in both official languages?

Indeed, would a francophone investor, regardless of where he or she lives in Canada, be entitled to receive a French version of annual reports and all other financial communications published by a publicly traded, federally regulated, company?    Canadian consumers are informed of the contents of their cereal box in either official language wherever in Canada they’re having breakfast. So why would it be any different when it comes to a national organization that is supposed to ensure Canadian investors are adequately informed about their investments?

Let's look at a concrete example. In the spring of 2008, Visa Inc. became a publicly listed company in Canada. To avoid the financial costs and delays involved in translating its (503-page) prospectus and related documents, Visa decided not to distribute and sell its shares to Quebec investors.

How would that be possible if Visa had been regulated by a national, or federal, commission? How could a federal agency endorse such a scenario, depriving francophone investors outside of Quebec as well as in Quebec from information in French?

This is not a minor issue. The cost to produce legally binding translations of all documents is enormous. At this time, even among the 253 largest listed companies in Canada, the companies making up the TSE-S&#38;P Index, only 81 (37%) publish their annual report in French and in English. Only 60% actually provide a French version of the all-important Management Information Circular, the document that provides information on executive compensation, proposes board members for election as well as any special resolution to be voted on by the general assembly of shareholders.

For the thousands of smaller companies listed on Canadian exchanges, the problem would be even more formidable. Proponents of a national, federal, securities commission better answer those questions before proceeding too hastily with their plan. Were a national securities commission to require that all communications of publicly traded companies with their investors be available in both official languages, the cost would be astronomical.

If a national, federal commission were required to insist that all documents sent to investors be made available in both official languages, the cost would be astronomical. Keeping the current system in place, which would suit everyone outside of Toronto and Ottawa, would save $154 million of taxpayers' money and tens of millions of dollars in translation fees for Canadian businesses, which have much more pressing priorities to deal with right now.
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