Tuesday, 22 June 2010

Proposed Federal Securities Regulator - Little Help for the Individual Investor

Worth reading: IndependentInvestor.info's Proposed Canadian Securities Act and investor protection: a failing grade. The thoughtful, detailed analysis and judgment of the proposed move by the federal government to create a national securities regulator shows how little improvement there really is likely to be for the individual investor in solving key problems: high fees for mutual funds, costly access to government of Canada securities, lack of fiduciary responsibility by the industry towards investors, inadequate civil court recourse against misbehaving financial firms, priority given to financial system protection over investor interests.

Blog author Marc Ryan concludes by quoting Minister Flaherty saying that the intent of the federal move is to enhance investor protection!

The article casts new perspective on provincial opposition to the move, which seems to be a federal-provincial blanket-pulling contest. Of course, the provinces could hardly cut to the gist of the matter and say that the federal solution is poor when their own laws and regulation don't do a very good job.

I've previously written in favour of having a national securities regulator but it just doesn't seem to be worth it as formulated, so I'm changing my mind as a result of this article. Do it right or don't bother. (As for my flip-flop I'll only doing as the great economist John Maynard Keynes, who said, "When the facts change, I change my mind. What do you do, sir?" from Wikiquotes which has a whole bunch of other wonderful Keynes quotes)

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