The connection between Dr. Seuss’ rhyming stories and the new initiatives by Canadian regulators and lawmakers to implement changes to Canada’s securities law (S-Ox North) reproducing the Sarbanes-Oxley Act’s changes in the United States’ legal regime is not immediately obvious. However there may be one. It often seemed that Dr. Seuss put one word after the other because of its rhyming qualities rather than its contribution to the creation of a coherent story. In the case of S-Ox North, Canadian regulators seem to be more concerned with harmonizing Canada’s securities markets rather than with addressing actual dangers facing market participants. One unanswered question is whether the S-Ox North changes address Canada’s capital structure where, in contrast to the United States, the issuers are predominantly
corporations in which a single shareholder or shareholder group has legal or factual control of the voting shares. Would it have made more sense to look at the recent corporate governance initiatives in the European Union, where the corporations’ capital structure more closely resembles that of Canada? Thus, it remains to be seen whether putting the Canadian corporate fox in S-Ox North is an exercise in rhyming or a coherent change for the better.