• Expert Panel on Securities Regulation/Groupe d'experts sur la réglementation des valeurs mobilières‏

    I was asked to post this by the folks at the federal government

    From an email sent today:
    The Hon. Thomas Hockin, Chair of the Expert Panel on Securities Regulation, has today released the Panel’s Final Report and Recommendations during a speech to the Vancouver Board of Trade.

    The Report and Recommendations, along with the Panel’s News Release, Mr. Hockin’s speech and background on the work of the Panel can be found at www.expertpanel.ca

    For further information please contact David Murchison, Executive Director of the Expert Panel on Securities Regulation in Ottawa at 613-947-8614 or George Bentley, Communications and Consultations Manager in Vancouver at 613-791-6741.

    L'honorable Thomas Hockin, président du Groupe d'experts sur la réglementation des valeurs mobilières, a présenté le rapport final et les recommandations du Groupe d'experts aujourd'hui, lors d'une allocution qu'il a prononcée devant le Vancouver Board of Trade.

    Le rapport et les recommandations, le communiqué du Groupe d'experts, le discours de M. Hockin et les renseignements de base sur les travaux du Groupe d'experts sont accessibles sur le site www.groupeexperts.ca.

    Pour de plus amples renseignements, veuillez communiquer avec David Murchison, directeur exécutif du Groupe d'experts sur la réglementation des valeurs mobilières à Ottawa, au 613-947-8614, ou avec George Bentley, gestionnaires des Communications et des consultations à Vancouver, au 613-791-6741.


 
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2 Comments
On Jan 19, 2009, Stan Buell Said:
Calling for a national regulator is old hat. It seems to me the media is missing the important aspect of the Panel's recommendations.

It was expected that not all provinces would support a national regulator. Québec’s Autorité des marchés financiers seems vastly superior to the CSA's in TROC and it will take time for TROC to get up to speed. As for Alberta, the ASC had (still has?) some embarrassing problems that need resolution.

However, we feel that whether there is a national regulator or a gaggle of provincial regulators it will make little difference to small investors unless there is fundamental change.

We believe the Expert Panel Final Report is recommending fundamental change.

Although their mandate did not include investor protection, our unsolicited submission and our subsequent discussions with the Panel emphasized the issue of current regulators failing to protect investors from financial fiascos and also failed to provide satisfactory remedies for victims.

The Panel wisely listened to investors and made some pertinent recommendation. They stated:
“Although not a core mandate item, we felt compelled to address a number of investor issues in light of our findings. We focus on the complaint-handling and financial redress mechanisms in Canada as well as the lack of representation of investors in the securities regulatory policy development process.”

The Expert Panel for the first time is recommending fundamental change that will improve the lives of countless Canadians. We estimate that Canadians were losing $20 billion per year due to investment industry malfeasance prior to last year's financial crisis and market crash. The regulators do not get victims’ savings back. They send them back to the perpetrators of the wrongdoing that caused their loss or recommends they take civil action. The latter option has been eroded with the Limitation Period being reduced in most provinces from six years to two years.

Some of the recommendations of the Final Report are critical for the financial health of Canadians. In particular it recommends:

“We recommend the following to improve investor complaint-handling and redress mechanisms:

· a securities regulator with the power to order compensation in the case of a violation of securities law so that the investor would not be required to resort to the courts;

· establishment of an investor compensation fund funded by industry to allow the securities regulator to directly compensate investors for a violation of securities law; and

· mandatory participation of registrants in the dispute resolution process of a legislatively designated dispute resolution body.”

SIPA’s submission to the Expert Panel contained recommendations including our top three:

1. National Regulator for Financial Services (NRFS) similar to Québec’s Autorité des marchés financiers. The website of the Autorité states: The Autorité des marchés financiers administers different laws and regulations applicable to Québec's entire financial sector. For each of four sectors of activity, the laws, regulations, guidelines, and all other legal texts concerning the organizations merged into the Autorité. The Securities Sector, the Distribution of Financial Products and Services Sector, the Financial Institutions Sector, and the Compensation Sector are all incorporated in the Autorité des marchés financiers. The NFRS should work with an enforcement agency such as the RCMP/police or Attorney General depending upon revised securities legislation.

2. National Investor Protection Authority (IPA) with a mandate for investor protection in all financial sectors. The IPA would be independent from the industry regulators and empowered to investigate or order investigations by police or regulators. The IPA would be established by statute and funded by Government. It could report to the Auditor General. The IPA would incorporate a special tribunal to hear investment complaints from small investors and pronounce judgment in timely fashion. When industry is found to have committed fraud or wrongdoing, the IPA would also be empowered to order restitution to the victims from an Investor Protection Fund. The IPA would also have Financial Services Victims Assistance Unit that will be staffed by specialists that can assist victims to deal with their situation and provide guidance on how to proceed. There are cases where victims need counselling and there should be provision for gaining exemption from limitation periods for those who proceed to civil litigation.

3. Financial Services Investor Protection Fund (FSIPF) that would respond to the IPA. The Government would provide initial funding to be recovered from the industry and/or regulators. This fund would be available to make payments to victims of financial wrongdoing including fraudulent acts, deceptive practices, or embezzlement and would be paid out upon instruction from the IPA. These funds would be recovered from industry and supplemented with punitive fines against firms who commit wrongdoing or employ representatives that do. The firms would be responsible for repayment for any wrongdoing by the firm or their representatives. In the event of bankruptcy of the firm the industry would be responsible through insurance or the regulators to compensate the FSIPF. The Government would provide initial funding to be recovered from the industry and/or regulators.

A copy of SIPA's unsolicited submission to the Panel, and our recent letter to the Minister of Finance, as well as the Final Report are on our website at www.sipa.ca.

We believe the Expert Panel Report is a most significant development that can be good for all Canadians ... IF THE RECOMMENDATIONS ARE IMPLEMENTED.

At least Québec has a better system with the Autorité des marchés financiers now than TROC, and appears to be a leader as far as investor protection and restitution are concerned. The Quebec courts in the Markarian v. CIBC decision has awarded punitive and moral damages that I believe to be a first in Canada.

Most Canadians are not too interested in whether the regulators are national or provincial. Those who have lost their savings have also lost their faith in the regulators. The public needs to know that the Expert Panel has recommended changes that will help them.

In previous submissions to Government we recommended a national Investor Protection Authority that could work with provincial regulators. We argued that the Government had a responsibility to treat all Canadians equally and ensure their rights to fair treatment are respected. Quebec and a few other provinces have taken some steps to provide compensation but Ontario, Alberta and others are woefully lacking.

Stan Buell, President
Small Investor Protection Association
P.O.Box 325, Markham, ON, L3P 3J8
website: www.sipa.ca
e-mail: sipa@sipa.ca
tel: 905-471-2911
On Jan 13, 2009, High-Quality-Links.com Said:
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