giles.anderson on Nostr: Big steps in crypto regulation in Canada today. It’s been two years since the ...
Big steps in crypto regulation in Canada today. It’s been two years since the regulatory framework was released (Staff Notice) 21-239 and in essence the regulators today threw the book at those taking a long time to complete the regulatory process.
Staff Notice 21-332 was released and basically says, if you want to be regulated and are not yet through the process (which began 2 years ago), here is how you will operate.
Staff Notice 21-332 is here
https://www.osc.ca/sites/default/files/2023-02/csa_20230222_21-332_crypto-trading-platforms-pre-reg-undertakings.pdf
And Noah Billick provides a good Cole’s Notes version https://www.linkedin.com/posts/noah-billick_this-morning-the-canadian-securities-administrators-activity-7034204593823600641-qLmj?utm_source=share&utm_medium=member_ios
Do read Noah’s post but here’s the short version.
“New rules include:
- a requirement to use an "Acceptable Third-Party Custodian" that is independent, regulated, and has necessary controls in place, and that will allow Canadian regulators to obtain information about Canadian clients directly from the custodian;
- a total prohibition on margin and leverage offered to any client;
- a commitment by non-Canadian mind and management to not interfere with the activities and Canadian directors' independence, as well as a broad undertaking that will "ensure that their activities will not undermine the Canadian Filer’s activities and its compliance with Canadian regulatory obligations."
- an exclusion of all crypto assets from the firm's regulatory capital calculation (including proprietary assets);
- Regular delivery of the CTP's financial information to the regulator; and
- A requirement that the CTP engage a Chief Compliance Officer qualified to meet the requirements of an Exempt Market Dealer (this is going to be an issue--there are very few qualified CCOs in the market right now) and the implementation of all of the responsibilities and processes that go along with that.”
In Canada the regulator has not decreed if Bitcoin (etc) is a security or not but today’s Staff Notice had some interesting views on stablecoins (they are probably securities.
Staff Notice 21-332 was released and basically says, if you want to be regulated and are not yet through the process (which began 2 years ago), here is how you will operate.
Staff Notice 21-332 is here
https://www.osc.ca/sites/default/files/2023-02/csa_20230222_21-332_crypto-trading-platforms-pre-reg-undertakings.pdf
And Noah Billick provides a good Cole’s Notes version https://www.linkedin.com/posts/noah-billick_this-morning-the-canadian-securities-administrators-activity-7034204593823600641-qLmj?utm_source=share&utm_medium=member_ios
Do read Noah’s post but here’s the short version.
“New rules include:
- a requirement to use an "Acceptable Third-Party Custodian" that is independent, regulated, and has necessary controls in place, and that will allow Canadian regulators to obtain information about Canadian clients directly from the custodian;
- a total prohibition on margin and leverage offered to any client;
- a commitment by non-Canadian mind and management to not interfere with the activities and Canadian directors' independence, as well as a broad undertaking that will "ensure that their activities will not undermine the Canadian Filer’s activities and its compliance with Canadian regulatory obligations."
- an exclusion of all crypto assets from the firm's regulatory capital calculation (including proprietary assets);
- Regular delivery of the CTP's financial information to the regulator; and
- A requirement that the CTP engage a Chief Compliance Officer qualified to meet the requirements of an Exempt Market Dealer (this is going to be an issue--there are very few qualified CCOs in the market right now) and the implementation of all of the responsibilities and processes that go along with that.”
In Canada the regulator has not decreed if Bitcoin (etc) is a security or not but today’s Staff Notice had some interesting views on stablecoins (they are probably securities.