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.