By Alastair Sharp and Leah Schnurr

TORONTO (Reuters) - A newly proposed common Canadian securities regulator would have to be altered significantly for Alberta to sign on, the oil-rich province's finance minister said on Tuesday.

Last week, the Canadian federal government and two provinces - Ontario and British Columbia - unveiled plans to set up a common securities regulator as a first step to their goal of replacing the current patchwork of provincial agencies.

Ottawa has tried for decades to persuade Canada's 10, mostly reluctant, provinces and three territories to create a national regulator similar to the U.S. Securities and Exchange Commission.

Alberta Finance Minister Doug Horner told reporters in Toronto the proposed watchdog would give the federal government too much power over what has been a provincial jurisdiction.

"From Alberta's perspective, that agreement would have to change in a fairly significant way for us to be able to sign it," he said.

"When you look at providing one jurisdiction with an all-out veto like the federal government, in an area of jurisdiction they really don't have that kind of a right to play in, why would we sign on to that?"

He said it was unclear whether the proposal could be changed if other provinces decided to join.

Alberta's preference is an improvement to the so-called passport system, in which all of the provinces except Ontario participate. It allows a company seeking regulatory approvals in one province to automatically be approved in another.

Horner said a group of provincial finance ministers that met in Quebec City on Monday will continue working on their own proposals. He noted that he had not had "much conversation" with federal Finance Minister Jim Flaherty.

"The good thing about the federal government proposal is it definitely spurred us into taking action," said Horner, noting that the group had agreed to speed up decision-making.

The federal government hopes the new securities regulator will improve Canada's reputation for being lax on white-collar crime.

Recently, regulators were criticized for their oversight of Sino-Forest Corp, one of several North American-listed companies with Chinese operations whose accounting disclosure practices came under scrutiny.

Critics also point to the infamous Bre-X scandal of the late 1990s, in which investors lost billions of dollars after a massive gold find turned out to have been a fake. No one was ever charged with fraud, and the lone figure who was charged with insider trading was acquitted.

(Reporting by Alastair Sharp, writing by Leah Schnurr; Editing by Jeffrey Hodgson and Chizu Nomiyama)

 

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