1. The Cooperative Capital Markets Regulatory System
Canadian Security Traders Association
23rd Annual Conference
Whistler, British Columbia
August 19, 2016
Doug Hyndman Canadian Securities Transition Office

2. Path to a Cooperative System
Many proposals for national regulatory structure
From the Royal Commission on Price Spreads to the Hockin Panel
Proposed Cdn Securities Act; Supreme Court Opinion
Federal Statute with voluntary provincial participation
Not within Parliament’s jurisdiction as drafted
Both orders of government have authority; cooperative approach available
Agreement for cooperative system
Initially British Columbia, Ontario & Canada
Later joined by Sask, New Brunswick, PEI, and Yukon
Draft legislation published for public consultation
Board of Directors appointed
Target implementation set for 2018
Jul 2016

3. Supreme Court of Canada (Dec 2011)
Comprehensive securities act is beyond federal jurisdiction
Each level of government has jurisdiction over some aspects of the regulation of capital markets
Provinces — “day-to-day” securities regulation
Federal — data collection, systemic risk, criminal
Each can work in collaboration with the other to carry out its responsibilities.

4. Cooperative System Elements
Capital Markets Regulatory Authority
Provincial/Territorial
Capital
Markets Act
(CMA)
Council of Ministers
Federal
Capital Markets Stability Act
(CMSA)
Regulations
Head Office — Toronto
Office in Each Participating Province and Territory
Regulations

5. The Authority (CMRA) Jointly established by participating governments
Single, operationally independent entity
Governed by expert board of independent directors
Tribunal separate from board and independent of regulatory functions
Self funded through a single set of fees

6. CMRA: Structure Council of Ministers Board of Directors
Appointment of Board and Tribunal members
Policy oversight, including power to reject or require consideration of a proposed CMA or CMSA regulation
Accountability oversight
Board of Directors
Governance of the CMRA, other than matters related to the Tribunal’s adjudicative functions
Power to make regulations and decisions under the CMA and CMSA
Regulatory Division
Led by the Chief Regulator
Administers and enforces the legislation
Provides policy advice to Board
Tribunal
Led by the Chief Adjudicator
Hears and decides on enforcement actions and appeals of regulatory division decisions

7. Cooperative Legislative Framework
Uniform Capital Markets Act (CMA) BC SK ON NB PE YK
Federal Capital Markets Stability Act (CMSA)
Capital Markets Regulatory Authority
(CMRA or Authority)
Established under CMRA Act

8. Capital Markets Act
Harmonized version of current provincial securities acts
Some new or modernized provisions, including new framework for derivatives
Published for comment Sept 2014; republished Aug 2015

9. Capital Markets Stability Act
Federal legislation to apply throughout Canada
National data collection
Systemic risk in national capital markets
Criminal offences related to capital markets
Published for comment Sept 2014; republished in May 2016
Revised version narrows scope somewhat

10. CMRA Act
To establish the Capital Markets Regulatory Authority as a joint federal-provincial entity
Will provide for:
structure, governance and oversight
appointment of board, chief regulator and adjudicative tribunal
legal capacities and immunities

11. Regulations Draft initial regulations under CMA
Based on existing provincial rules/national instruments
Eliminate differences in requirements among participating jurisdictions
Make other changes only as necessary to fit existing rules with CMA
Minimize disruption for market participants
Published for comment August 2015
No regulations proposed under CMSA before launch

12. Regulations yet-to-come
Capital-raising exemption regulations
to be published later as a separate consultation package
CCMR fee regulation
considerable work done but regulation awaits firmer budget forecasts
Interface with non-participating jurisdictions
still to be negotiated
Transition provisions to address legal continuity issues
detailed table published last December

13. Board of Directors CMRA will be created in 2018
Meanwhile, governments have created an interim entity, Capital Markets Authority Implementation Organization (CMAIO), to
permit appointment of the initial Board
provide a vehicle to advance work on integrating the existing securities regulators into the CMRA
Initial Board of 15 directors appointed July to assist in transition and implementation

14. Board Members William Black, chair Andrea Bolger Joan Dunne
Garth Girvan
Rory Godinho
Nancy Hopkins
Peter Klohn
Douglas Knight
Jill Leversage
Harold MacKay
John McCoach
Jean-Pierre Ouellet
Vicky Sharpe
Eric Tripp
Howard Wetston

15. Timelines for 2018 Launch 2016 July — Board of Directors appointed
2017 — Legislative and integration work to proceed
2018 June — Legislation enacted in all jurisdictions
2018 — Cooperative system launched

16. www.ccmr-ocrmc.ca www.cmaio.ca
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