The Canadian Securities Administrators (CSA) – the national body comprising Canada’s various provincial financial markets regulators – has released for comment a set of proposed regulatory requirements for public investment funds seeking to invest in crypto assets.
Stan Magidson, President and CEO of CSA and CEO of the Alberta Securities and Exchange Commission said;
“We recognize that the current regulatory framework for public investment funds needs to be adapted to address the unique aspects and risks of crypto assets. Formalizing these core requirements will provide fund managers with greater clarity while we continue to assess whether a more comprehensive regime is required.”
The proposed amendments adjust the requirements for public investment funds investing in crypto assets to better protect investors and reduce risk. The requirements include investment restrictions on crypto assets and custodial obligations.
The proposed amendments are the second phase of a project to implement a Canadian regulatory framework for public investment funds that hold crypto assets. In the third phase of the project, the CSA will consult publicly on a wider framework.
There is a 90-day comment period, and interested parties are invited to submit written comments on or before April 17, 2024.
The CSA reminds Canadians that investing in crypto assets, even through public investment funds, is higher risk and may not be suitable for most retail investors. In general, investing in crypto assets is a speculative activity and the value and liquidity of crypto assets are highly volatile. While regulatory oversight of public investment funds plays an important role in protecting investors, these measures cannot eliminate all risks associated with investing in crypto assets.
The CSA, the board of securities regulators of Canada’s provinces and territories, coordinates and harmonizes regulation of the Canadian capital markets. The CSA cryptographic rule proposals it can be downloaded from the Ontario Securities and Exchange Commission website here.