The Supreme Court of Canada ruled this morning that Ottawa’s proposed Securities Act, as it is presently drafted, does not fall under the general branch of the federal power to regulate trade and commerce.
The proposed act calls for the creation of a single Canadian securities regulator to provide investor protection, promote fair and competitive capital markets and help ensure the stability of Canada’s financial system.
The act includes disclosure requirements, duties for market participants, registration requirements for securities dealers and prospectus filing requirements.
The court ruled the proposed act “overreaches general national concerns.”
It stated that, although the economic importance of the securities market may support federal intervention that is different from what the provinces can do on their own, it doesn’t justify a federal takeover of the regulation of the securities industry.
The ruling said the act is generally concerned with the day-to-day regulation of all securities transactions within the provinces, which makes them provincial concerns, not federal.
But it also stated that some aspects of the act did appear to fall under national scope, including national data collection and management of systemic risk.
Emma Crawford