CSA chair advises shareholders to review guidelines
The Canadian Securities Administrators (CSA) released guidance aimed at assisting fund managers in understanding and adhering to securities regulations concerning public investment funds that hold crypto assets, also known as public crypto asset funds.
The issued guidance not only provides an overview of these public crypto asset funds operating within Canada but also outlines the various oversight initiatives undertaken by the CSA members. Key points covered in the notice also include:
- Evaluation of market characteristics of crypto assets that could impact their suitability as investments for public crypto asset funds
- Expectations regarding the custody of crypto assets held on behalf of these funds
- Clarifications on yield-generating activities, such as staking, undertaken by public crypto asset funds
The CSA took this opportunity to remind Canadian investors about the inherent risks involved in investing in crypto assets, even through public investment funds. Emphasizing that such investments carry higher risks and may not be suitable for most retail investors, the CSA highlighted the speculative nature of crypto assets, which are highly volatile in terms of value and liquidity.
While regulatory measures play a vital role in protecting investors, they cannot completely eliminate all the risks associated with crypto asset investments.
"We encourage stakeholders to review this guidance to better understand our expectations of public crypto asset funds," said Stan Magidson, CSA chair and chair and CEO of the Alberta Securities Commission.
"It is important for such funds to clearly understand their existing regulatory obligations given recent events in the crypto market," he said.
