09/19/2013 10:16 EDT | Updated 11/19/2013 05:12 EST

Ontario-B.C. Securities Regulator A Step Towards National Oversight Body

OTTAWA - The federal, B.C. and Ontario governments have taken a first step towards what they hope will be a national body to oversee Canada's investment industry, announcing Thursday they plan to set up a co-operative securities regulator.

Finance Minister Jim Flaherty and his counterparts in B.C. and Ontario also invited all the provinces to join them in the proposed system, which they hope to have in place by July 1, 2015.

Flaherty and Ontario have long sought a national securities regulator to replace the current collection of provincial and territorial bodies, but the Supreme Court blocked a plan in 2011 by the federal government create one.

British Columbia was among the provinces to oppose Flaherty's initiative but it had been considered to be more flexible in its position than some of the others.

"All of us listened and we came together, putting aside our differences to focus on a common goal: to modernize our capital markets and to make them more competitive," Flaherty said.

Quebec and Alberta led the fight against yielding jurisdiction to a national regulator and successfully argued their case at the top court.

However, the Supreme Court said Ottawa does have a role in guarding against systemic risk and could seek a co-operative approach with the provinces, which have responsibility for the securities industry.

"B.C. has consistently supported the concept of a co-operative securities regulatory system that respects constitutional jurisdiction, builds on the strong foundation of the current system, improves enforcement, and is responsive to regional markets such as B.C.'s venture capital markets," B.C. Finance Minister Michael de Jong said.

"This agreement meets those principles and priorities. I hope other jurisdictions give serious consideration to joining the co-operative system.”

The new regulator will administer a single set of regulations and be directed by a board of independent directors. It will have a head office in Toronto and a nationally integrated executive management team.

"Ontario has for many years taken a leadership role in the creation of a co-operative securities regulator because it is in the best interests of all provinces and will help our businesses grow," Ontario Finance Minister Charles Sousa said.

Canada is the only major industrialized country without a national securities regulator. Supporters of the current system suggest it reflects the diverse needs of the various regions of Canada, while opponents say that the system is unwieldy and costly for companies.

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