The expressed views are personal and not those of CAE.

If the federal and provincial governments wish to create the best possible securities regulatory system for Canada, 3 key steps must be taken:

1. Create one National Securities Commission in Canada. If one National Securities Commission is unattainable due to ongoing provincial jealousies over jurisdiction, job location and fiscal issues, then at a minimum, harmonize provincial standards with reciprocal recognition to create an integrated national market.

2. Separate the investigative and adjudicative functions underpinning securities regulation.

3. Make the National Securities Commission responsible for corporate governance standards (rather than the TSX), with a preference for flexible guidelines rather than rigid rules.

In addition, it is my submission that we should be seeking harmonized standards with American securities regulators to facilitate continuing mutual recognition; and increasing commonality between Canadian and American generally accepted accounting principles to facilitate investor understanding and confidence.

These recommendations are made in the belief that regulatory reform, while necessary and welcome, cannot offset the fundamental challenge facing Canadian capital markets - limited scale and scope leading to relative illiquidity.

D. H. Burney