News Release 10-051

Archived - Fact Sheet on Proposed Canadian Securities Act

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The proposed Canadian Securities Act (proposed Act) represents one key step towards the Government of Canada’s longstanding commitment to establish a Canadian securities regulator.

Approach and Direction

  • The proposed Act seeks to harmonize existing provincial legislation in the form of a single statute. It also benefits from the work of the Expert Panel on Securities Regulation and other reform efforts, and reflects domestic and international best practices
  • The proposed Act’s structure is consistent with more recent federal legislation regarding the financial sector. Specifically, the Act contains the core fundamental provisions, while the more detailed and technical requirements would be set out in the forthcoming regulations.

Mandate and Governance Framework

  • The proposed Act establishes the structure, governance and accountability framework for the Canadian Securities Regulatory Authority (CSRA).
  • The foundation of the CSRA’s mandate, which is set out in the proposed Act, would be:
    • to provide protection to investors from unfair, improper or fraudulent practices;
    • to foster fair, efficient and competitive capital markets in which the public has confidence; and
    • to contribute, as part of the Canadian financial regulatory framework, to the integrity and stability of the financial system.
  • The CSRA would be a Crown corporation with a board of directors appointed by the Governor in Council, which would be accountable to Parliament through the Minister of Finance. The CSRA would be self-funded from fees levied on market participants.
  • The CSRA would be comprised of two divisions: the Regulatory Division led by the Chief Regulator (Chief Executive Officer) and the Canadian Securities Tribunal, which would be headed by the Chief Adjudicator. The two divisions would participate in a Regulatory Policy Forum that would serve a consultative function and inform the policy-making of the CSRA. The CSRA would also benefit from advice from an Investor Advisory Panel.
  • The board of directors would oversee the operations, activities and budget of the CSRA. The board’s responsibility for the Canadian Securities Tribunal would relate to budgeting and administrative matters and overall performance, but to preserve the Tribunal’s independence, would not extend to any adjudicative functions.

Provincial/Territorial Participation

  • The proposed Act establishes a Federal/Provincial/Territorial Council of Ministers consisting of the Minister of Finance and a minister from each participating province and territory. The Council would have a statutory mandate to facilitate consultations and the exchange of information with respect to the administration of the Act and securities regulation policy in general.
  • In addition, the Council of Ministers would advise the Minister of Finance on appointments of the board chair and members, the Chief Adjudicator and other members of the Canadian Securities Tribunal, and the Chief Regulator. The Council would consider the CSRA’s annual report and its statement of priorities. It would also be consulted on the scope of the five year review of the Securities Act and the membership of the review committee.
  • The Council of Ministers would also be directly involved in the development of regulations and policies. Each member of the Council of Ministers or their delegate would be able to participate in the Policy Forum and table a proposal for discussion. The Chief Regulator would be required to specifically respond to the proposal at the next meeting at which Council members or their delegates attend.


  • The proposed Act would lead to a strengthened, comprehensive, and coordinated enforcement regime for Canadian capital markets that would better protect investors. It brings together all securities-related offences and enforcement powers under one statute, creating a comprehensive enforcement regime. It contains new investigative tools and streamlined securities-related criminal offences. The insider trading offence has been modified to facilitate insider trading prosecutions.
  • The criminal powers and criminal offences in the proposed Act would apply in all jurisdictions, including non-participating provinces. The proposed changes are intended to enhance the ability of all law enforcement and prosecutors in all jurisdictions to achieve better criminal enforcement outcomes across Canada.
  • The proposed Act respects the current federal-provincial arrangements relating to the prosecution of securities-related criminal offences under the Criminal Code. Under the proposed Act, the federal government and the provincial governments would have concurrent jurisdiction over the prosecution of criminal offences. The provinces would, however, have the right of first refusal on the prosecutions of these offences, as set out in applicable agreements. The prosecution of offences would take place in the appropriate provincial court of jurisdiction.
  • With a comprehensive enforcement regime, the CSRA would be able to undertake regulatory enforcement actions as well as investigate securities-related crime, like fraud and insider trading, in a manner that would be set out in an agreement with each province. Establishing the CSRA’s new role in criminal enforcement would allow it to appropriately tailor enforcement responses to the seriousness of the suspected misconduct and it would make available greater resources and expertise to combat securities-related crime.

Financial Stability Role

  • The proposed Act establishes a statutory mandate for the CSRA to contribute, as part of the Canadian financial regulatory framework, to the integrity and stability of the financial system. The CSRA would monitor and evaluate issues and developments affecting the integrity or stability of capital markets.
  • The CSRA would work closely with, and share pertinent information, as appropriate, with other financial authorities such as the Department of Finance, the Bank of Canada, the Office of the Superintendent of Financial Institutions, the Canada Deposit and Insurance Corporation, and the Financial Consumer Agency of Canada.

Scope of Authority

  • The proposed Act gives the CSRA the authority to oversee and regulate a wide range of market participants and financial instruments, including exchange-traded and over-the-counter derivatives.
  • As well, the proposed Act provides the CSRA with sufficiently broad oversight powers to supervise and regulate market participants, including dealers, advisers, investment fund managers, exchanges, clearing agencies, self-regulatory organizations, credit rating agencies, trade repositories and auditor oversight organizations This regulatory platform, relying on registration, as well as designation and recognition orders, would ensure the CSRA is positioned to establish a governing framework for such market participants.

Regulation-making and Reporting

  • The proposed Act gives the CSRA regulation-making powers for carrying out the purposes and provisions of the proposed Act. A detailed public consultation and publication process is required before making a regulation and is set out in the proposed Act. All proposed regulations would be subject to the consent of the Minister of Finance. The Governor in Council would have directive powers to order the Authority to make, amend or repeal a regulation on the recommendation of the Minister of Finance. There are also urgent regulation-making powers in the proposed Act that would allow temporary adoption of a regulation without the prescribed public comment period.
  • The CSRA would have clear reporting requirements set out in the proposed Act. It would be required to submit an annual report to the Minister of Finance with respect to its operations and activities for that year. The report would contain financial statements, a list of regulations and policy statements made that year, and an assessment of the extent to which the purposes of the Act have been fulfilled by the CSRA. The Minister of Finance would be required to table it in Parliament. A copy would also be given to each member of the Council of Ministers. The public would have an opportunity to make comments and ask questions regarding the CSRA’s report at an annual public meeting, which the chair of the board and the Chief Regulator would be required to attend.
  • The CSRA would also be required to submit to the Minister of Finance an annual statement of priorities in connection with the administration and enforcement of the proposed Act. The Council of Ministers would be consulted on both the annual report and statement of priorities.

Securities Regulatory Requirements

  • The substantive requirements for market participants in the proposed Act are modeled primarily on existing provincial and territorial legislation. The fundamental principles relating to registration, prospectuses, disclosure and take-over bid requirements are incorporated into the proposed Act, while technical requirements and exemptions that relate to these substantive provisions would be set out in regulations. In addition, the proposed Act consolidates the market conduct requirements and provides the CSRA with the powers to take action against those that choose not to meet these requirements.
  • It is expected that the initial regulations would be primarily derived from the harmonized national instruments that have been developed by provincial and territorial securities regulators. In addition, stakeholders would be consulted during the development of the regulations.

Voluntary Participation

  • The proposed Act reflects the Government’s preference for and commitment to a process under which the Canadian securities regulatory regime would apply as willing provinces and territories opt in, with the objective of having one, single national securities regulator supported by a comprehensive statutory and regulatory framework that applies across Canada.

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