TORONTO (miningweekly.com) – The Prospectors & Developers Association of Canada (PDAC) on Friday applauded the Thursday announcement by the Finance Ministers of British Columbia, Ontario and Canada that the three jurisdictions would work to establish a cooperative capital markets regulatory system.

Canada’s Finance Department on Thursday said the proposed cooperative securities regulator would better protect investors, enhance Canada’s financial services sector, support efficient capital markets and manage systemic risk.

It will feature a single regulator administering a single set of regulations and be operationally independent and self-funded through a single set of fees. An expert board of independent directors with broad capital markets-related expertise will direct it, and a council of Ministers of all participating jurisdictions would oversee the cooperative system.

The regulator would have an executive head office in Toronto and a nationally integrated executive management team, ensuring policy leadership from regulatory offices.

The Ministers agreed that the cooperative system would preserve the elements of the current system that worked well, including the ability to weigh and consider local perspectives, and would achieve needed reforms within a national context.

“By pooling provincial and federal expertise, the cooperative securities regulator will contribute to a stronger economy, improve investor protection and better respond to increasingly competitive, dynamic and global capital markets,” the department said.

"We applaud the Finance Ministers for laying the groundwork for more uniformity in securities regulation across Canada. While this is an important step in the right direction, we look forward to learning more details to fully understand the system and if it will indeed reduce regulatory burden and costs,” PDAC executive director Ross Gallinger said.

The PDAC has long called for uniform securities regulation and enforcement across Canada.

The association said its members pointed out that regulatory complexity, ever-increasing compliance costs for publicly listed companies and a lack of enforcement as significant barriers for capital raising for exploration and mining.

Junior exploration companies, which make up the bulk of the PDAC's membership, accounted for about 25% of Canada's publicly listed companies, and they relied on equity financing for grassroots mineral exploration.

"The PDAC has consistently called for a securities regime that is simple, consistent across the country and eliminates redundancies associated with multiple securities regulators. Elements of the cooperative system have the potential to address some of these concerns, particularly the commitment to a simplified fee structure and enforcement against misconduct.

“We stand ready to work with the Finance Ministers on the design elements of the cooperative system to reduce regulatory burden, facilitate capital-raising and maintain the integrity of Canada's capital markets,” Gallinger said.