The Department of Finance has announced that it plans to shutter the Canadian Securities Transition Office in July 2013.
In the wake of the Supreme Court of Canada decision ruling that proposed legislation to create a national regulator is unconstitutional, the federal government has set a new date for closing the CSTO, which was created to establish the new regulator. The latest edition of the Canada Gazette indicates that the governor general has set July 12, 2013 as the date for the dissolution of the office.
Doug Hyndman, chairman of the CSTO, says that the order amounts to a one-year extension for the office.
The proposed national regulator was scheduled to start operation in July of this year. However, the court’s decision, handed down last December, effectively killed the proposal by ruling that securities regulation falls largely under provincial jurisdiction.
The recommendation to dissolve the office came from the federal Finance Dept., which indicated in its budget last month that it still intends to work on a national authority with interested provinces. In the budget, the government said that it will respect the Supreme Court decision, but that a number of provinces, “have reaffirmed their interest in working on a co-operative basis toward a common securities regulator.”
The court’s decision opened the door to a more co-operative federal-provincial model, and suggested that there are areas of genuine national concern, such as systemic risk. However, apart from that statement of support for the idea in the budget, there was no new commitment from the government to pursue a national regulator.
***
Correction: An earlier version of this story implied that the Canadian Securities Transition Office would close in July 2012.