Tariffs-Free Regulatory Importing?
Asad Akhtar
Part One: Contrasting the Capital Markets
Before the discussion on the proposed policies can begin, it is important to highlight two
key distinctions between the Canadian and American framework for regulating the capital
markets. (1) The lack of a national securities regulator, and (2) the public interest jurisdiction
that exists with many provincial regulators significantly impacts the efficiency and historical
approach taken by the OSC in responding to breaches of securities law.
A. Regulatory Framework in Canada & Ontario
In contrast to the United States, and all developed nations, Canada does not have a
national securities regulator. Instead, every province maintains its own capital market regulatory
agency. Many commentators highlight the lack of a national securities regime as a weakness in
the Canadian capital markets.5 While provincial regulators attempt to achieve harmonization by
implementing uniform rules, often referred to as national or multi-lateral instruments (“NI”),
through a collective forum, it is often impossible to completely avoid jurisdictional overlap and
accountability challenges.6 Additionally, it has been persuasively argued that a common
securities regulator would be better positioned to address systemic risk, collect data, lower costs
and streamline administration process for market participants than the existing framework.7
1. Provincial Regulation – Ontario and the OSC
While the history of securities regulation in Canada began with the Manitoba’s Sales of
Shares Act of 1912, it has been Ontario that consistently paved the path for new regulatory
Julia Johnson, “Streamlining securities regulation no easy feat for Canada’s fractious provinces”, Financial Post
(25 June, 2013) online: Financial Post .
6
Poonam Puri, “Securities Litigation and Enforcement: The Canadian Perspective”, (2012) 37:3 Brook. J. Int'l L at
975.
7
Ibid at 976.
5
9