A steering committee reviewing the proposed merger of the two Canadian brokerage self-regulatory organizations is now looking at whether the single entity would meet two sets of criteria, said Edward Waitzer, chair of law firm Stikeman Elliot in Toronto, who works with the committee. Waitzer told a conference hosted by the Ontario Securities Commission that both “static” and “dynamic” criteria must be met. Static criteria is the Canadian Securities Administrators’ recognition criteria, which includes governance standards, conflicts of interest, open access, viability of systems, and transparency fairness, Waitzer noted. This would be the basic set of criteria, which the committee expects the merged entity to meet.
The Investment Dealers Association and Market Regulation Services approved a proposal to merge in April. The SROs created the joint steering committee to develop a detailed implementation plan for merger approval. The committee includes independent and non-independent board members from IDA and RS, who meet almost every week, Waitzer, who acts as a counsel to the SROs, told CR. Task forces were also created to deal with different issues and report back to the committee, he added.
The static criteria serves as a starting point, Waitzer said at the Nov. 10 conference. Dynamic criteria centers on how to improve upon the status quo, he said. The challenge is how to raise the bar and get the securities regulators comfortable with the capacity of the self regulatory body and its performance, Waitzer told CR. “Why would you disrupt the status quo unless you thought you could raise the bar?” he asked.
For the past four or five months the committee has tried to figure out the organizational structure and governance process for the new entity. Waitzer, who attends most meetings, told CR the committee is actively in discussions with the securities regulators and he predicted a merger plan will be ready for a vote early in the New Year. Once the steering committee issues its implementation plan, the members of both SROs will vote. It is up to the securities regulators to then decide whether the merger makes sense, he said.