The USTA is the centerpiece of the Phase I reform. Modelled on the highly successful revisions to Article 8 (Revised Article 8) of the American Uniform Commercial Code (now in effect in every state of the U.S.), the USTA will modernize and streamline Ontario’s law governing the transfer or pledge of securities. The USTA should be implemented chiefly because the current state of the law in Canada is woefully inadequate to deal with sophisticated multi-jurisdictional transactions involving transfers or pledges of book-based securities, which now comprise the vast majority of publicly traded securities. Without the USTA, Canada is well on its way to one day becoming a marginalized backwater in the capital markets as business continues to flow south, primarily to New York and Chicago.
As the centre of the Canadian capital markets, Ontario should provide leadership in this important area of commercial legislation. Doing so will increase the likelihood that the other provinces and territories will adopt the Ontario model verbatim for their own jurisdictions – a critical objective. Implementing the USTA would offer many immediate benefits for Ontarians (and ultimately for all Canadians, if implemented uniformly across Canada).
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David G. Butler
Wayne D. Gray
Robert M. Scavone
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