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Securities regulator law coming in 'days': Flaherty

Finance Minister Jim Flaherty said he will complete legislation that would create a national securities regulator within "days," evidence that he remains committed to the plan despite opposition from Quebec.

For most of his four years in office, Mr. Flaherty has voiced his frustration with Canada's patchwork approach to overseeing the buying and selling of stocks, bonds and other securities.

Speaking to reporters before a dinner speech at an economics conference, Mr. Flaherty presented another exhibit for his case to replace the country's 13 provincial and territorial regulators with one federal body: the alleged fraud committed by Goldman Sachs Group Inc. while selling certain credit derivatives.

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While authorities in Britain and Germany have said they will see whether the U.S. charges against Goldman were committed in their countries, Mr. Flaherty said he is powerless to do the same in Canada.

"We are not directly," Mr. Flaherty said when asked whether he was looking into Goldman's sales practices in Canada. "This is one of the challenges that I have in the Canadian situation. Securities regulators now are provincial and so it's a provincial responsibility."

Governments have tried for decades to introduce a national regulator only to give up in the face of provincial resistance, especially Quebec. Mr. Flaherty appears set to succeed, however, by pushing ahead with a plan to create a national regulator with provinces that are willing to go along, leaving holdouts to retain their current systems.

"Our government is moving to a national securities regulator," Mr. Flaherty said. "Legislation will be ready within a matter of days. I look forward to tabling it within a matter of weeks."

That won't be soon enough to look into the U.S. allegations about Goldman Sachs, which some legal experts have said could spread to other firms.

Mr. Flaherty said he hasn't asked provincial authorities to look into the issue, although he said he would be stunned if they weren't.

"I have not directly," Mr. Flaherty said when asked whether he had talked to provincial regulators about Goldman Sachs. "I would be very surprised if they were not, particularly the Ontario Securities Commission, was not engaged on this subject, but I have not discussed it with them directly."

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About the Author
Senior fellow at the Centre for International Governance Innovation

Kevin Carmichael is a senior fellow at the Centre for International Governance Innovation, based in Mumbai.Previously, he was Report on Business's correspondent in Washington. He has covered finance and economics for a decade, mostly as a reporter with Bloomberg News in Ottawa and Washington. A native of New Brunswick's Upper St. More

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