I bet I'm the only blogger on the planet who thinks securities regulations makes for interesting reading.
Ah well. Assuming the thought of who gets to set what rules on takeovers and dividend distributions and so forth does not force you into a state of involuntary rigour as per the poor creature in the photo that forms the banner of this blog, read on.
Essentially, the Investment Dealers Association has issued a report in which they recommend the creation of a new federal court that will specialize solely on cases involving securities. But what's really significant is why they want this court. They want to move away from the rules-based system in place today, and to a principles-based system.
The current system, they say, is too arbitrary.
What does this mean? The Ontario Securities Commission currently sets the rules, enforces the rules, and passes judgment on the rules and the rulebreakers. The Minister of Government Services, to whom the OSC reports, is by and large a spectator. And forget about the legislature. The Securities Act essentially hands over the ability to create and manage laws regarding securities to the OSC. What the IDA wants is a division of powers. They want the elected legislature to creates the laws and a court the adjudicates these laws. As for the OSC, they will still be allowed to enforce the laws, but the commission would be dramatically cut down in size:
The proposed national court, however, does not mean the provincial regulators will be abolished, Mr. Allen said.
"There would still be a role for certain offences to be addressed at the regulator level -- relatively small matters, such as whether a registrant was guilty of an improper filing, for example," he said.
Relatively small matters? Don't expect the OSC to push for the implementation of these recommendations anytime soon.
All the details are at Angry in the Great White North.
Yeah just what the public wants, more weak knee'd wimps doling out wrist slaps to corporate criminals.
Gotta hand it to the Investment Dealers though, they sure make it 'sound' good.
Nit:Pick
I don't think there's a "u" in rigor mortis, Kate.
But then, I don't think there's one in "colour" either, so what do I know.
mojo, dude, Kate's turned over her blog to a bunch of guys... it ain't Kate posting.
Basically, SDA appears to be a conservative blog aggregator now.
I work in the financial service industry and this has been a long time in coming...it's a real pain to have to deal with each province individually when you service clients living across the country (especially where I am on the border between Quebec/Ontario) and have to register with and meet standards for various provincial regulatory bodies etc...it would simplify things greatly if many of the requirements became national instead.
Christoph, SDA has been a Conservative blog for at least as long as I've been visiting (since October 2005), where have you been??
Mojo, are you an American by chance? Here in Canada there are a few words that we spell with a "u" that you guys don't (colour being the most common), just like we spell cheque instead of check! And if you're Canadian - shame on you!!
kneecapping the OSC????
but isnt this what the right wing conseeeeeeervatists want? unfettered markets a.k.a. deregulation ronald reagan style???
the enron scandal happened because of weak regulation and/or enforcement.
kenneth lay supported the bush grab for power and vice versa.
a weak OSC is EXACTLY what the right wing conservative want.
they just lie about it to cover their personal agenda and insatiable greed.
"Overhaul" is regulator-speak for "superficial tinkering"....don't worry you can still file those wildly inflated red herring prospectus for your start up and get away with it...se see them every day and I don't suspect there will be a change soon...besides, these days if you invest in the stock market you are either an isider or a looter. Development cap is the way for the Mom and Pop money to go...they have been stung too many times with Nortel-like over inflated stock busts.
When it comes to enforcement of securities regulations, and especially pusuit of securities fraud, I think the Americans are way ahead of Canada. They at least try to bring some of the glaring cases to justice. Not so in Canada. In fact, often times, it is investigation or charges instigated by the SEC in the USA that is needed to get the OSC off its duff to look into some of the stunts being pulled.
Reform is needed. Trouble is, who can you trust nowadays to actually reform the system to better serve the investing public? Most of the time, the 'reformers' are simply trying to tilt the scales more in their own special interests favor.
Just my 2 cents.
What answer would you expect?? They would love unregulated investing. How much money laundering would go on and still does go on??
This is going on in the states with regards to insurance -- insurance is regulated at a state level, due to tradition. But it's a major pain in the ass (and then there are the states that get involved in setting premiums or trying to decide retroactively that certain policies cover damages that they explicitly do not cover in the written contract.) So they're asking for federal charters and regulation, like banks can have (again, that used to be on a state-only basis).
There's a case to be made for federal regulation vs. state/province regulation that's not just a matter of "who benefits?". In the U.S., the dept of insurance in some states is incompetent and/or heavily driven by politics; in some states, they're much stronger than federal regulators in terms of resources and enforcement. It can go either way.
I agree with the the Investment Dealers to junk the kangaroo court of the OSC. My wish is to junk security regulation in Canada entirely and give it to the SEC. The OSC is a joke! We've had YBM, Bre-X, Royal Technologies,Nortel and etc.under their supervision. Its time to allow Can. investors to get rid of the excessive Brokerage fees or in Mutual funds the MER's. and go directly to brokers or Funds in the USA, where investors have protection or fraud results in real jail time!