TORONTO, Aug. 6, 2024
/CNW/ - The Canadian Securities Administrators (CSA) and the
Canadian Investment Regulatory Organization (CIRO) are reminding
crypto trading platforms (CTPs) to ensure their
operations comply with Canadian securities laws by prioritizing
their applications for registration as investment dealers and
membership with CIRO.
On March 29, 2021, the CSA and the
Investment Industry Regulatory Organization of Canada (now CIRO) published Staff Notice
21-329 Guidance for Crypto-Asset Trading Platforms:
Compliance with Regulatory Requirements, providing guidance on
the securities law requirements that apply to CTPs.
In Canada, CTPs that facilitate
trading in either a) crypto assets that are securities
and/or derivatives or b) instruments or contracts, based on
crypto assets, that are securities or derivatives, are
expected to register as investment dealers and become members of
CIRO, the regulatory body intended to oversee this type of
activity.
As outlined in the staff notice, the CSA contemplated an
interim approach, which allowed CTPs to operate as restricted
dealers in an appropriately regulated environment for a
time-limited period while working toward obtaining CIRO membership.
CSA members expected CTPs to actively and diligently seek
registration as investment dealers and membership with CIRO by the
end of the time-limited period, which was generally expected to be
two years.
Given the time that has passed, CSA members expect CTPs to have
carefully reviewed and understood the requirements to become
investment dealers and CIRO members, and be actively engaged with
CIRO on their applications. Moving forward, CSA members do not
intend to continue with the interim approach for time-limited
restricted dealer registration for CTPs as described in the staff
notice.
CTPs that have been working actively and diligently with CSA
members to complete their registration should contact the CSA
member that is their principal regulator to discuss whether
time-limited registration as a restricted dealer is appropriate for
the CTP.
Applying for CIRO membership
CIRO is committed to ensuring an efficient and thorough process
to review CTPs' applications for membership with CIRO. Guidance on
applying for CIRO membership is available on CIRO.ca under the
Becoming a Dealer Member section. CTPs are encouraged to
complete a Readiness Questionnaire to self-assess if they have
the necessary infrastructure and capital in place to apply for
membership.
CTPs must submit a completed Membership Application
Form and all supporting materials to apply for CIRO
membership. All membership applications undergo an extensive
review by CIRO staff. Once satisfied that the CTP can comply
with CIRO By-laws and Rules, CIRO staff will forward their
recommendation to CIRO's Board of Directors for decision.
CIRO staff work closely with firms applying for membership and
encourage applicants to contact MemberIntake@ciro.ca to
arrange for a pre-filing discussion with the CIRO team dedicated to
managing membership applications and transactions.
We encourage all CTPs to consult their legal counsel about
Canadian securities law and CIRO rules, and to contact their
principal regulator or CIRO staff with any questions.
Investors interested in crypto assets
Investing in crypto assets can be high risk. Before
choosing to buy or sell crypto assets, the CSA urges
investors to consult the list of CTPs that are authorized to
do business with Canadians.
The CSA, the council of the securities regulators of
Canada's provinces and
territories, co-ordinates and harmonizes regulation for the
Canadian capital markets.
The Canadian Investment Regulatory Organization (CIRO) is the
national self-regulatory organization that oversees all investment
dealers, mutual fund dealers and trading activity on Canada's debt and equity marketplaces. CIRO is
committed to the protection of investors, providing efficient and
consistent regulation, and building Canadians' trust in financial
regulation and the people managing their investments. For more
information, visit www.ciro.ca.
For investor inquiries, please contact your local
securities regulator.
For media inquiries, please contact:
Ilana Kelemen
Canadian Securities Administrators
media@acvm-csa.ca
JP Vecsi
Ontario Securities Commission
media_inquiries@osc.gov.on.ca
Joanna Nicholson
Canadian Investment Regulatory Organization
jnicholson@ciro.ca
SOURCE Canadian Securities Administrators