OTTAWA: The Supreme Court of Canada ruled on Thursday against the Canadian government's plan for a national securities regulator that would replace the current patchwork of provincial watchdogs and regulations.
The court ruled unanimously that the government's draft legislation would unconstitutionally encroach on provincial jurisdiction.
However, the court said a federal provincial cooperative scheme would be acceptable and it said the federal government did have a proper role in trying to prevent systemic risk to maintain Canada's financial stability.
The decision left Canada for now as the only major developed economy without a national regulator. Finance Minister Jim Flaherty submitted the draft law to the Supreme Court in May 2010 and had planned to implement his plan next year if the court had said it was legitimate.
The name of the case is In the Matter of a Reference by Governor in Council concerning the proposed Canadian Securities Act, as set out in Order in Council P.C. 2010-667, dated May 26, 2010 (33718).
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