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Should Canada have a single national securities regulator?

Categories: Business

CBC News has found that millions of dollars in penalties levied by provincial securities regulators have gone unpaid, leading to renewed calls for a single national regulator.

 Ontario, whose Securities Commission regulates the TSX, is in favour of a national securities regulator. (CBC)"We have done a very poor job in this country, and that is one of the major criticisms within the country and internationally about Canada's approach to enforcement with financial crime," said Ermanno Pascutto of the Canadian Foundation for Advancement of Investor Rights.

The federal government had a plan to create a national regulator, called the Proposed Canadian Securities Act, but the Supreme Court ruled it unconstitutional in December.

The court struck down the plan, saying it would tread on provincial legal jurisdiction, but didn't close the door to a future "co-operative approach" to creating a national body.

Canada is one of the few G8 countries that doesn't have a single national regulator to govern companies that want to sell stocks, issue bonds or other financial products to the public. Currently, every province and territory has its own securities regulator.

Proponents claim a national regulator would help discourage white-collar crime by giving officials increased authority to enforce the rules. Finance Minister Jim Flaherty has championed the creation of a national securities regulator since his first day in office in 2006.

"Those who commit securities fraud will face a tougher, more comprehensive regime. No more falling through the cracks," Flaherty said in the spring of 2010, when he announced plans to go to the courts for support of his plan.

Major international bodies such as the Organization for Economic Co-operation and Development and the International Monetary Fund already support the plan.

Detractors note that the presence of a single regulator in the U.S. -- the New York-based Securities and Exchange Commission -- did little to avert or subsequently punish those responsible for the financial meltdown of 2008.

Lower courts in Alberta and Quebec previously ruled that Ottawa is treading on provincial jurisdiction with its proposed legislation. The governments in those provinces are unwilling to surrender more control of their economies to the federal government.

Should Canada have a single national securities regulator? Why or why not? Let us know what you think.

(This survey is not scientific. Results are based on readers' responses.)

Tags: Business, law, money, Politics

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