Although 2002 saw a number of significant regulatory initiatives in Canada come to fruition, the
regulatory initiative that has undoubtedly grabbed the most headline space in Canadian capital
markets is the US’ enactment of the Sarbanes-Oxley Act and the attendant rule-making exercises that the Securities and Exchange Commission (SEC) has undertaken.
Undoubtedly, the initial visceral reaction of Canadian regulators and market participants alike was that given the proximity and inter-connectedness of Canadian and US capital markets, a harmonising regulatory response by Canadian securities regulators was absolutely essential to maintain confidence in the integrity of Canadian capital markets. As time has passed and the entrails of the Enron, WorldCom and other marquee corporate collapses that prompted the US legislative response have begun to be probed in more detail, the wisdom of mechanistically adopting the US rules in Canada has become subject to debate.
