Written By Jon Truswell, Jeff Kerbel, James McClary, Justin Lambert and James Bartlett
On March 29, 2016, Alberta Finance Minister J Ceci formally announced that the Province of Alberta would not join British Columbia, Saskatchewan, Ontario, and other jurisdictions in the creation of a national securities regulator. Minister Ceci's announcement re-affirms the position taken by previous Alberta provincial governments.
The Cooperative Capital Markets Regulatory System was first proposed on September 19, 2013, in an effort to create a single securities regulatory body for Canada (see Federal, Ontario and BC Governments Announce New Securities Regulator). Initially spearheaded by the provincial governments of Ontario and British Columbia and the federal government, participating jurisdictions now also include Saskatchewan, New Brunswick, Prince Edward Island and the Yukon. Quebec and Alberta have formally rejected the Cooperative System, while Manitoba, Newfoundland, Nova Scotia, the Northwest Territories and Nunavut have not yet announced a definitive stance.
In announcing Alberta's decision, Minister Ceci noted that Alberta has a unique and specialized capital market, which requires local and specialized knowledge from its securities regulator. The new chair of the Alberta Securities Commission (ASC), Stan Magidson, echoed that sentiment on the day of his appointment by stating that there is energy regulation and disclosure expertise in Alberta which make it best suited to regulate its own securities market. Minister Ceci and Mr. Magidson both expressed support for pursuing national harmonization through the current passport system developed by the Canadian Securities Administrators, where an issuer may access markets in multiple jurisdictions in Canada by dealing with one principal regulator.
The practical effect of Alberta not participating in the Cooperative System remains to be seen. Draft legislation and regulations have been published by the participating jurisdictions with the aim of having the regulatory system operational in the fall of 2016 (see Cooperative Capital Markets System Publishes Revised Draft Legislation and Draft Regulations), but details of the interface between the Cooperative System and any non-participating jurisdictions, such as Alberta, have not been announced.
Many Alberta issuers rely on the passport system to issue securities across Canada, other than in Ontario, which does not participate in the passport system. These issuers therefore often deal directly with both the ASC and the Ontario Securities Commission. If the Cooperative System is adopted, many Alberta issuers would be required to comply with both local rules and the Cooperative System, which introduces many changes to the securities laws currently existing in Ontario and other participating jurisdictions. Alberta issuers should continue to monitor developments regarding the Cooperative System over the coming months.
Further details can be found on the Cooperative System's website.