The Canadian Securities Administrators and the Investment Industry Regulatory Organization of Canada jointly published a consultation paper on crypto-trading platforms and are seeking input from market participants.
“This consultation outlines a proposed regulatory framework that provides clarity for platforms, greater market integrity and protection for investors,” said Louis Morisset, CSA chair and president and chief executive officer of the Autorité des marchés financiers in a press release. “Platforms have told us that a tailored regulatory framework is welcome as they seek to build consumer confidence and expand their businesses across Canada and globally.”
Platforms used to trade cryptocurrencies may be required to be subject to current regulations applying to securities or derivatives trading, the paper noted. As well, there could be risk aspects of cryptocurrencies that aren’t sufficiently considered within Canada’s current regulations. In the consultation paper, the CSA and IIROC consider a tailored regulatory framework that would address the asset class’ particular risks.
Specifically, the paper is seeking input on questions of how to address custody and verification of assets, price determination, market surveillance, systems and business continuity planning, conflicts of interest, crypto-asset insurance, as well as clearing and settlement issues.
“The emergence of digital and crypto assets continues to be a growing area of interest for regulators, investors and marketplaces – and, together, securities regulators are taking steps to deepen our understanding of this area,” said Andrew Kriegler, president and chief executive officer of IIROC. “We must adapt to innovation, and provide clarity to the market about how regulatory requirements might best be tailored and applied to these unique business models, while maintaining investor protection.”
The comment period on the consultation paper is open until May 15, 2019.