Ontario Pensions Protest Proposed Regulations

Canada

Three Ontario pension plans are protesting new legislation that would bring the plans under the supervision of a national securities regulator.

The regulator’s purpose is to prevent system risks in the country’s financial system.

But the regulator would also have “unprecedented” powers, and pension funds are uncomfortable with the idea.

From the Globe and Mail:

The three pension plans, all representing public sector workers in Ontario, argue it is unnecessary and even inappropriate to bring pension plans under the supervision of a proposed new national securities regulator in Canada, which is being given expanded authority to oversee so-called systemic risks that can threaten the stability of Canada’s stock markets.

The Healthcare of Ontario Pension Plan (HOOPP), the Ontario Municipal Employees Retirement System (OMERS) and the Ontario Teachers’ Pension Plan Board submitted a joint comment letter in December to federal Finance Minister Joe Oliver urging officials to remove pension plans from the draft Capital Markets Stability Act, which is still under review and has not yet been adopted.

HOOPP chief executive officer Jim Keohane said in an interview the act gives the proposed new regulator unprecedented powers to order companies or funds under its control to do anything it deems necessary to prevent systemic risks in the financial system.

“This act, as it reads right now, gives this regulator unbelievable powers that no other regulator in the world has,” he said.

“It can prohibit or restrict any business activities that we undertake. It could force us not to trade securities. The regulator can at its discretion order us to do anything it deems necessary to address systemic risk. It’s completely open-ended,” Mr. Keohane said.

The act is one of two new pieces of legislation published together in September that would create a new federal-provincial securities regulator, and separately create a new national systemic risk oversight regime to be managed by the regulator.

Breaches of the Capital Markets Stability Act carry fines of up to $25 million.

 

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