TORONTO, JUNE 29 -- -- Canada's securities industry will be radically altered by deregulation of the nation's major market, set to take effect Tuesday, that allows foreign dealers and domestic bankers to crack a long-exclusive club.
Deregulation in Ontario will affect the industry nationwide because the province, the center of Canadian finance, accounts for 75 percent of securities business in the country. And the other nine provinces, which had more liberal rules, are moving toward greater openness.
New rules governing ownership of securities dealers will open the highly guarded industry in two steps, lifting barriers to foreigners and domestic institutions outside the industry such as banks, trusts and insurers.
New rules were introduced in December by Monte Kwinter, Ontario's financial institutions minister. The Canadian government then proposed federal changes that would allow Ontario's new rules.
A Canadian government spokesman said the federal legislation to allow the changes was expected to be enacted Tuesday in Parliament.
Effective Tuesday, regulations will permit foreign ownership of 50 percent of a Canadian securities dealer. Foreigners previously were limited to 10 percent ownership. They also will be allowed to register and conduct what are called "exempt market'' transactions such as trading in government and corporate bonds.
One year from Tuesday, foreign investors will be allowed 100 percent ownership and will be unrestricted.
Domestic institutions were given a one-year head start. As of Tuesday, Canadian banks, trusts, insurers and investors, also previously limited to 10 percent, will be allowed 100 percent ownership