On December 22, 2011, in the Securities Act Reference, the Supreme Court of Canada held that the federal government's proposed national Securities Act was not constitutionally supportable under its general trade and commerce power. Ottawa's attempt at the comprehensive regulation of capital markets and securities trading throughout the country, the Court held, would be an improper "wholesale takeover of the regulation of the securities industry," and therefore an unjustified intrusion into provincial spheres of power. With this decision went any hope of a quick transition to a single, comprehensive national securities regulator. The federalism principle upon which Canada’s makeup rests, the Court stated, precluded unilateral federal action towards that end. However, the Court recognized—really for the first time—a legitimate federal interest in aspects of securities regulation, including preventing and responding to systemic risk, maintaining fair, efficient and competitive capital markets and collecting data nationwide.
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