Archived - Memorandum of Agreement Regarding the Cooperative Capital Markets Regulatory System


BETWEEN:

collectively, the “Participating Jurisdictions” and each, a “Participating Jurisdiction”.

1. Context
In this MOA, the following terms have the following meanings:

In entering into this MOA and participating in the Cooperative System, each of the Participating Jurisdictions is addressing matters within its constitutional jurisdiction and is neither surrendering nor impairing any of its jurisdiction, with respect to which it remains sovereign.

If there is an inconsistency between a provision of this MOA and a provision of the Cooperative System Legislation, then the provision of the Cooperative System Legislation will govern.

3. Principal Components of the Cooperative System

The Participating Jurisdictions agree to the following:

The co-chairs responsible for the administration of the Council of Ministers will be the Minister of Finance of Canada and, on a two year rotational basis, the responsible Minister from each Major Capital Markets Jurisdiction.

The Council of Ministers will be responsible for:

The Participating Jurisdictions agree to the following:

An appointment of a member of the Board of Directors or of the Tribunal or a vote regarding an interface mechanism with non-Participating Jurisdictions must be approved by:
5.2 Voting on a Regulation made by the Board of Directors
A request by the Council of Ministers to the Board of Directors to consult on and consider making a regulation under the Provincial Capital Markets Act or the Federal Capital Markets Stability Act must be approved by:

The Minister from a provincial or territorial Participating Jurisdiction may request the Board of Directors of the CMRA to consult on and consider making a regulation to accommodate provincial or territorial government programs that relate to specific economic development initiatives within his or her provincial or territorial Participating Jurisdiction subject to the consultation and approval processes that apply to the making of regulations. The Board of Directors shall approve the request provided that the proposed regulation will not, in the opinion of the Board of Directors, adversely affect the fundamental principles of the CMRA, affect market participants or investors in other jurisdictions or involve other matters of national importance. If the costs of administering that regulation are material, the CMRA may require reimbursement from the provincial or territorial Participating Jurisdiction.

A regulation made under this section by the Board of Directors of the CMRA will require the approval of the Minister from the provincial or territorial Participating Jurisdiction to which the regulation relates before it comes into force.

A proposal to amend the Provincial Capital Markets Act must be approved by:

The Minister of Finance of Canada will consult with the other members of the Council of Ministers prior to any federal proposal to amend the Federal Capital Markets Stability Act.

A decision to approve any of the following matters during the three-year period after the date on which the CMRA commences operations will require the unanimous approval of the Council of Ministers. Thereafter, a decision to approve any of the following matters will require the approval by (A) at least two-thirds of all members of the Council of Ministers; (B) the members of the Council of Ministers from each Major Capital Markets Jurisdiction; and (C) the Minister of Finance of Canada:

The Participating Jurisdictions agree to the following:

The Council of Ministers must appoint a nominating committee to recommend candidates for appointment to the Board of Directors and the Tribunal on the following basis:

The members of a nominating committee must be independent of the governments represented by the Council of Ministers and possess appropriate qualifications and capital markets-related experience.

The Participating Jurisdictions agree to the following:

The Board of Directors will be composed of at least nine (or five during the transition period) and no more than 12 directors, all of whom must be independent. As a group, the Board of Directors will possess the requisite capital markets expertise, including international capital and venture market expertise, and will be broadly representative of the regions of Canada. The Board of Directors will meet at the executive head office of the CMRA and other larger offices of the CMRA on a regular basis.

The Board of Directors will be responsible for:

Each director will be appointed by the Council of Ministers, on the recommendation of a nominating committee to hold office for a fixed term, which can be renewed. In making a recommendation, the nominating committee must select nominees pursuant to a merit-based search and evaluation process in accordance with the highest standards of corporate governance.

The Board of Directors will recommend a chair from among its members for confirmation by the Council of Ministers.

The provincial Participating Jurisdictions confirm that they have approved in principle the English language version of the Provincial Capital Markets Act (subject to such changes as may be agreed to) and will seek legislative approval.

The Participating Jurisdictions agree that, as a condition subsequent to this MOA, the initial regulations (the “ Initial Regulations ”) under the Cooperative System Legislation will be approved. In developing the Initial Regulations, the Participating Jurisdictions agree to the following:

The Participating Jurisdictions confirm that they have approved in principle the Federal Capital Markets Stability Act (subject to such changes as may be agreed to) and that the Government of Canada will seek enactment by Parliament.

The Participating Jurisdictions agree that, as a condition subsequent to this MOA, each Participating Jurisdiction will approve the CMRA Charter Documentation, and seek legislative enactment to the extent necessary.

The Participating Jurisdictions agree that the CMRA will have:
The Participating Jurisdictions agree that:

The Parties agree that there shall be no appointment of any additional deputy chief regulator representing non-Major Capital Markets Jurisdictions or regions.

Organizational design of the CMRA will be guided by the following principles, which will be applied by the Board of Directors:

(i) Every regulatory office should have staff, expertise and resources that are commensurate with the capital markets activity, and regulatory and enforcement demands of the Participating Jurisdiction.

(ii) Each regulatory office should continue to provide the range of services provided as of the date of this MOA with local decision making authority within common standards and the employment of current staff in that office will continue.

(iii) Each regulatory office should be managed by a director, who should coordinate the delivery of regulatory functions to enable timely and effective responses to the needs of local market participants and investors. The director should ensure that the deputy chief regulator responsible for the province or region is aware of local interests in the development and application of policy.

(iv) Management and staff in each regulatory office should be empowered to make day-to-day decisions on regulatory matters, guided by common interpretations and common standards.

(v) Management and staff from all offices should communicate actively to exchange information about best practices and to consult, and bring specialized skills and knowledge to bear, on novel issues.

(vi) Regional and market sector perspectives should be weighed and considered in major policy and operational decisions by including regionally-based staff in developing policy approaches and operating priorities and processes.

(vii) The CMRA should foster an environment that helps recruit and retain in all offices talented and qualified staff who will embrace the vision for the organization and work to fulfil its mandate.

(viii) The CMRA should promote a culture of innovation that values ideas and perspectives from all offices and from other sources (including investors, market participants and other stakeholders) that contribute to delivering better and more cost-effective regulation.

This office structure is intended to leverage the expertise in capital markets regulation available across Canada to enhance efficiencies and reduce costs, while remaining responsive to local needs. The provincial regulatory offices will deliver consistent regulation in accordance with common standards in a way that is responsive to the interests of Canada’s investors, regions and market sectors.

The Participating Jurisdictions agree that:

The operations of the CMRA in a provincial or territorial Participating Jurisdiction will be carried out in compliance with any official languages legislation of that provincial or territorial Participating Jurisdiction.

The Participating Jurisdictions agree to:

The Ministers representing each Participating Jurisdiction (or their designees) have formed a committee to oversee the transition and implementation of the Cooperative System (the “Committee”). The Committee has established and is supervising an implementation team (the “Implementation Team”), which is dealing with the day-to-day transition and implementation of the Cooperative System including the planning, execution and completion on a timely basis of all the implementation milestones set forth in section 10.3 of this MOA (the “Implementation Milestones”). Each Major Capital Markets Jurisdiction and Canada has selected one member for the Implementation Team. The Implementation Team reports to the Committee on the status of its efforts to satisfy the Implementation Milestones. The Implementation Team will work collaboratively with all Participating Jurisdictions.

The Participating Jurisdictions agree that the implementation of the Cooperative System will occur in several phases and agree to use their best efforts to achieve the Implementation Milestones on the following timeline:

Based on this timeline, the Participating Jurisdictions expect the CMRA to be operational in the fall of 2015.

The Government of Canada will:

The Participating Jurisdictions agree that the CMRA will use its best efforts to negotiate and implement an interface mechanism with each jurisdiction that is not a Participating Jurisdiction such that the Cooperative System contemplated by this MOA is, effectively, of national application.

Any disputes regarding the interpretation of this MOA will be resolved by consultation among the Participating Jurisdictions.

A Participating Jurisdiction may withdraw from the Cooperative System by providing at least six months’ written notice to the other Participating Jurisdictions. A Minister of a Participating Jurisdiction that has provided written notice to any other Participating Jurisdiction of its intention to withdraw from the Cooperative System will no longer be entitled to vote as a member of the Council of Ministers.
The CMRA shall use all reasonable efforts to facilitate an expeditious withdrawal and the transfer and/or assignment of employees, assets and contracts relating to capital markets regulation in a withdrawing Participating Jurisdiction as of the effective withdrawal date.

By signing this MOA, in counterparts, the Ministers representing the Participating Jurisdictions indicate their agreement to it and their acknowledgment that this MOA constitutes the entire agreement between them with respect to its subject matter (superseding all prior and current agreements and understandings including the Amended Agreement in Principle to Move Towards a Cooperative Capital Markets Regulatory System dated July 9, 2014 but excluding the transition funding agreements dated July 9, 2014 between each of the Governments of Saskatchewan and New Brunswick, on the one hand, and the Government of Canada, on the other hand) and is the only agreement or understanding entered into by each of the Participating Jurisdictions with respect to the subject matter of this MOA. Each counterpart shall be deemed to be an original and such counterparts together shall constitute one and the same instrument deemed to be dated as of the latest date on which a counterpart is signed (notwithstanding the earlier execution of the remaining counterparts).

“Michael de Jong”

Her Majesty the Queen in right of British Columbia
as represented by the Minister of Finance of the
Province of British Columbia, Michael de Jong

August 26, 2014

“Charles Sousa”

Her Majesty the Queen in right of Ontario as
represented by the Minister of Finance of the
Province of Ontario, Charles Sousa

August 26, 2014

“Gordon Wyant”

Her Majesty the Queen in right of Saskatchewan
as represented by the Minister of Justice and
Attorney General of the Province of Saskatchewan, Gordon Wyant

August 26, 2014

“Troy Lifford”

Her Majesty the Queen in right of the Province of New Brunswick
as represented by the Minister of Justice
of the Province of New Brunswick, Troy Lifford

August 20, 2014

“Joe Oliver”

Her Majesty the Queen in right of Canada
as represented by the Minister of Finance
of Canada, Joe Oliver

August 28, 2014

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