Federal Budget Update on Common Securities Regulator

The 2012 Federal Budget provides an update on expected action on a Common Securites Regular, subsequent to the December 2011 Supreme Court Decision to disallow a National Securties Regulator.

The following excerpt from the from the 2012 Federal budget provides an overview of the federal government’s current stance on the issue:

Common Securities Regulation in  Federal Budget 2012: www.budget.gc.ca/2012/plan/pdf/Plan2012-eng.pdf  (p.127)

Fostering Stable, Competitive, Fair and Efficient Capital Markets

In light of the Supreme Court’s securities reference, the Government is consulting with provinces and territories, a number of which have reaffirmed their interest in working on a cooperative basis towards a common securities regulator.

As part of the initiative to establish a Canadian securities regulator, in May 2010 the Government referred the proposed Canadian Securities Act to the Supreme Court of Canada for an opinion as to whether Parliament has the constitutional authority to enact the proposed legislation. On December 22, 2011, the Supreme Court determined that the proposed Act as drafted was not constitutionally valid under the general branch of the federal power to regulate trade and commerce. The Government of Canada respects this decision and will act in accordance with it.

The Supreme Court also found that Parliament has a role with matters of genuine national importance and scope, including management of systemic risk and in ensuring fair and efficient capital markets nationally. The Supreme Court indicated that “[t]he common ground that emerges is that each level of government has jurisdiction over some aspects of the regulation of securities and each can work in collaboration with the other to carry out its responsibilities”. Accordingly, the Government is consulting with provinces and territories, a number of which have reaffirmed their interest in working on a cooperative basis towards a common securities regulator.

A common securities regulator would give Canada a competitive advantage by reducing unnecessary compliance costs for issuers, strengthening our ability to respond to financial instability, enhancing enforcement and better serving the needs of all Canadians.

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