Ontario is urged to adopt the passport rule to introduce speed and eliminate additional costs
The securities regulatory authorities of British Columbia, Alberta, Saskatchewan, Manitoba, Québec, Nova Scotia, Prince Edward Island, New Brunswick, Newfoundland and Labrador, Nunavut, Northwest Territories and Yukon (CSA members), today published a response to the Ontario Capital Markets Modernization Taskforce (“Taskforce”) Final Report (“Report”) issued January 22, 2021.
CSA members commend the expeditious work completed by the Taskforce which is very useful to bolster our collective reflection on how to advance the Canadian securities regulatory regime. The response outlines the CSA’s perspective on how the Government of Ontario can best achieve the recommendations while also enhancing harmonization, efficiency, responsiveness and investor protection.
“A highly harmonized securities regulatory system ensures the best possible outcomes for the Canadian capital markets,” says Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers. “Attempting to implement many of the recommendations outside of CSA mechanisms and processes would risk creating inter-jurisdictional friction and adding regulatory burden on market participants across Canada.”
It is imperative that all policy-development work, current and future, be subject to a robust process which not only includes countrywide public consultations with all stakeholders (both market participants and investors as well as their advocates), but also includes appropriate research and cost-benefit analysis.
Ontario remains the only jurisdiction in Canada that has not adopted passport. Embracing passport would significantly reduce the regulatory burden for all Canadian market participants by introducing speed in regulatory decision-making and eliminating the additional costs of dealing with multiple regulators. “This can be achieved quickly and easily as the rule is already in place and would yield immediate benefits,” says Morisset. “We urge the Ontario Finance Minister to act in the best interest of all Canadian market participants and adopt the passport rule,” says Morisset.
All CSA members have, in some form, a mission to foster fair, efficient and vibrant capital markets and this is achieved with equal emphasis on investor protection. A proposition to change the Ontario regulator’s mandate to foster capital growth without commensurate attention to investor protection is of concern and should be approached with caution. A harmful imbalance would jeopardize the CSA’s sound policy-making approach and introduce risk of disharmonization.
You may read the CSA members’ full response to the Ontario Capital Markets Modernization Taskforce Final Report here.
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