OTTAWA (Reuters) - The Canadian government is abandoning plans to create a national securities regulator in light of a December ruling by the Supreme Court of Canada, Canadian Press reported Finance Minister Jim Flaherty as saying on Thursday.
The news agency said Flaherty told it in Davos, Switzerland, that he recognized that the day-to-day regulation of financial markets was a provincial responsibility, as Canada’s top court ruled in December.
However, CP said Flaherty said he still hoped to create a national body that would monitor systemic risks to financial markets, a responsibility that he said could not be handed over to the Office of the Superintendent of Financial Institutions.
There was no immediate confirmation of the CP report from Flaherty’s office in Ottawa.
The December 22 court ruling said proposed federal legislation to create a national regulator, similar to the U.S. Securities and Exchange Commission, “overreaches the legislative interest of the federal government.”
The court, however, did leave the door open to the possibility of a more unified securities regime on certain matters, while retaining areas of provincial jurisdiction.
The court pointed to certain areas relating to systemic risk - derivatives, short-selling, credit rating and data collection - as areas where the federal government could legitimately get involved.
Flaherty said at the time it was clear the government could not proceed with the draft bill that the court examined.
Reporting by Randall Palmer; Editing by Peter Galloway