UPDATE 2-Canada seeks support for securities watchdog plan

* Sees July 2012 launch

* No headquarters site named in transition plan

* Provinces must sign on to plan by September
(Adds details, background)

By Louise Egan and Jennifer Kwan

OTTAWA/TORONTO, July 13 (BestGrowthStock) – Canada’s proposed
national securities regulator would have a strong presence in
all corners of the country, according to a blueprint released
on Tuesday that also set new deadlines for reform.

In the document, the Canadian Securities Transition Office,
set up by the federal government, laid out detailed plans of
how to carry out the politically delicate task of replacing 13
provincial and territorial watchdogs with a single oversight
body in July 2012.

The plan has met fierce resistance from two powerful
provinces, Quebec and Alberta, but will go ahead with willing
provinces and territories, Ottawa has said. Governments have
until September of this year to sign on to the plan.

Ontario politicians have lobbied hard for Toronto, the
provincial capital and the country’s financial hub, to house
the headquarters of the new regulator, media reports said. The
Toronto Financial Services Alliance, an industry group, said
housing the regulator in the city makes pragmatic sense. But
doing so could irk some other provincial capitals.

Department of Finance spokesman Jack Aubry said no decision
had been made yet regarding a head office.

The transition plan appeared to respond to fears that a
regulator based in Toronto would not properly address investor
needs in local markets. It suggested a strong role for
provincial offices and policymakers as well as a gradual
phase-in of national standards.

“I don’t think there will be headquarters, or head office,
in the traditional sense. It’s not that type of organization,”
said Larry Ritchie, executive vice president and senior policy
adviser at the transition office.

“Clearly the chief regulator will be located somewhere.
That issue is something that will have to be worked out over
the next year or so as the plan becomes more refined,” he told
Reuters.

“AN EMBARRASSMENT”

Canada’s patchwork regulatory system is unique in the Group
of Seven major industrialized countries and Finance Minister
Jim Flaherty, the main driver of reform, has called it an
“embarrassment”.

Ottawa argues it would be easier to oversee markets and
crack down on white-collar crime across the country under a
single regulator, as well as to co-ordinate with the U.S.
Securities and Exchange Commission and regulators in other
countries as global financial reforms are launched following
the financial crisis.

Canada’s current minority Conservative government has come
closer than any of its predecessors to launching a single
securities regulator.

But it still faces formidable obstacles. Quebec and Alberta
have launched court challenges to the reform on the grounds it
encroaches on their jurisdictions. The Canadian government has
asked the Supreme Court of Canada for its opinion, which is not
expected until sometime after April next year.

Joseph Groia, a Toronto securities lawyer, said that in
taking pains to ensure that decision-making would be spread
evenly across the country, Ottawa is effectively weakening the
new regulator.

“The new system looks like it’s going to be just as
fractured,” he said.

The transition plan contemplates parliamentary approval of
legislation by December 2011. There could well be an election
before then, and even if the Conservatives maintain their
minority standing they will face a skeptical opposition.

“I can’t even speculate on that,” Ritchie said. “Our
instructions and our approach is just full steam ahead.”
(Editing by Peter Galloway)

UPDATE 2-Canada seeks support for securities watchdog plan