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National regulator likely to be built one block at a time

Canada may be on the road to a single national regulator, but it's a very long road, and we're moving down it in baby steps.

Ian Russell, CEO of the Investment Industry Association of Canada, took on the age-old issue of just who in this country can better regulate its markets in a speech yesterday in Toronto.

There seems room for a great leap forward. Finance Minister Jim Flaherty is banging the drum for a national regulator. Former federal minister Tom Hockin is out studying the issue with yet another learned committee. So there's political will in Ottawa to get something substantial done on the regulatory front, despite the expected resistance from regional interests in Quebec, B.C. and Alberta.

Yet Mr. Russell, who is well respected on the Street, is urging caution and compromise.

"The possibility of market dislocations and uncertainties that may arise from forcing a federal model down provincial throats may be too high a price to pay," said Mr. Russell, after rhyming off the many reasons why such a federal model makes sense.

With the scars that come from two decades as the investment industry's point person on public policy, Mr. Russell instead suggested an incremental approach just might, gasp, get the provinces and the feds finally speaking with one voice on regulating markets.

His idea, which echoes the thoughts of many pragmatic policy types, would be to give existing national bodies more muscle. It would all start with the Canadian Securities Administrators, or the CSA, an umbrella group for the country's 13 provincial and territorial regulators.

In Mr. Russell's view, the CSA should be given greater power to set country-wide rules. OSFI, the federal bank and insurance regulator, could then evolve some sort of partnership with the CSA. Over time, the CSA could supplant provincial bodies.

It's a stealthy approach, and it's all going to take years to unfold. But one of the wisest of wonks thinks this is Canada's best shot at achieving capital market regulation that's in step with the rest of the industrialized world.

IPOs out of fashion

Judging by the dearth of tech IPOs in the pipeline, there's not going to be many companies of tomorrow making their debut, well, tomorrow or at any time in the near future.

During the first quarter of 2008, five tech companies withdrew planned offerings, according to a survey done this week by website The list of companies that pulled back from a market that's not buying small-capitalization stocks includes Atrion, Biox Corp., BroadShift, Lavell Systems, and Ultrasonix Medical Corp. The retreat follows on a thin IPO market in 2007, when six companies filed the paperwork for financings, then pulled back.

TechFinance's survey showed there are just two tech companies still planning IPOs.

See Andrew Willis's Streetwise Blog at

© The Globe and Mail

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