Major Securities Reform Upended (in Canada)

January 4, 2012

What would have been a major legislative accomplishment by the incumbent administration is now dead, thanks to the Supreme Court. Some observers are completely shocked, others seem to have sensed it was coming.  Still, it’s a major setback in the attempt to become the last major world economy to enact this type of regulation on the national level.

I’m referring, of course, to the Supreme Court of Canada’s December 22nd advisory opinion, Reference re Securities Act, which ruled that the Canadian Government’s proposal to create a national securities Regulator would be  unconstitutional if enacted.  The opinion can be found on Westlaw at 2011 SCC 66 (note that this is a non-unique cite used for both the English and French language opinions).  Canada is the only industrialized country that does not regulate its securities trade at the national level, and it seems for now, that it’s not going to start in the near future.

For some initial reaction to (and analysis of) the decision, I recommend searching SECURITIES & DA(AFT 12/21/2011 & BEF 12/24/2011) in the GlobeMail database.  This relatively simple search retrieves 21 articles from one of Canada’s leading news publications, nearly all of which are directly on point.  When searching for securities and finance related materials, searching the plural “Securities” can lead to far more accurate results than searching for Security or Securit!.

While the Government’s proposed plan is now off the table, the advocates of a national securities regulator are not finished, especially when the Supreme Court’s opinion is seen as having left the door open for future efforts.  For some ideas about where this debate will go next, I went to the TP-Canada database and did a search for securities /s regulat! /s national federal.  This yielded 195 hits, with 35 coming from the past 3 years.  Those 35 should give you a good sense of the roads-not-taken-but-not-yet-Constitutionally-barred.

Research References

Check out the Canadian Securities Administrators Website:

The 10 provinces and 3 territories in Canada are responsible for securities regulations. Securities regulators from each province and territory have teamed up to form the Canadian Securities Administrators, or CSA for short. The CSA is primarily responsible for developing a harmonized approach to securities regulation across the country.

Canada’s System for Electronic Document Analysis and Retrieval (SEDAR) can be found on Business Law Research’s Securities-Canada tab along with a variety of Canadia-specific securities secondary sources: