A revised draft of legislation published by Canada’s Department of Finance has left pension funds and other “intermediaries” off the list of players that would have been governed by a new national securities regulator, according to an article in the Globe and Mail.
The new version of the Capital Markets Stability Act, which is open for public comment until July 6, proposes to give a new national securities regulator power to address systematic risks related to capital markets. The article says the 2014 draft of the legislation had faced criticism for giving the proposed new regulator broad and sweeping powers to impose operating conditions on a number of players deemed “intermediaries” in the capital markets, such as pension funds, investment funds and securities dealers.
Read: Pension funds protest new legislation
The new version of the act no longer lists any categories of organizations deemed to be “systemically important” in the system, including these intermediaries, as well as credit rating organizations, clearing houses, trading facilities and other players in the markets.
“Sound capital markets in Canada are essential to creating conditions that will grow the economy, create jobs and strengthen the middle class,” said the government in a statement. “The proposed legislation would provide new tools to manage systemic risk so that well-functioning capital markets can continue to achieve these goals.”
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The revised consultation draft responds to public comments received during the initial consultation in 2014. It proposes:
- targeted powers to manage systemic risks related to capital markets – all entity-level designation powers, except for trade repositories, have been removed;
- stronger protections for confidential information collected by the Capital Markets Regulatory Authority for systemic risk surveillance purposes;
- enhanced procedural provisions; and
- measures to strengthen regulatory coordination between the authority and other regulators.
Read the full article here