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Canada mulls changes to securities regulation

Attempt to unify approach across provinces

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Canada mulls changes to securities regulation

OTTAWA—Canada's finance minister has set up a task force to review securities regulation across the nation, but experts question whether the review will lead to concrete securities reform or if it will have any effect on the directors and officers liability insurance market.

The task force is charged with recommending how Canada can develop a system that streamlines regulation across various jurisdictions, possibly through creation of a uniform securities law and a single securities regulator. Currently, securities regulation varies by province and territory.

A single regulator may improve enforcement of securities laws, potentially increasing the exposure of directors and officers, but companies would welcome the ability to deal with a uniform code rather than the current patchwork system, said Murn Meyrick, senior vp, corporate counsel for Toronto-based Executive Risk Services Ltd.

"For companies, it would certainly make it more convenient and expeditious in dealing with one entity," Ms. Meyrick said.

Whether a uniform securities law or regulator becomes a reality is questionable as provinces such as Ontario and Quebec have resisted such efforts in the past, D&O experts say. For example, Ontario did not sign a memorandum of understanding in 2004 that aimed to harmonize and modernize the securities regulatory system.

The task force will deliver a final report and a draft model securities act to Finance Minister Jim Flaherty as well as provincial and territorial governments by the end of the year.