A Canadian regulator proposed new fund rules for investment in crypto, as it aimed to guide the funds in mitigating risks and improving user protection.
The Canadian Securities Administrators (CSA), which regulates Canada’s capital markets, have proposed new crypto rules for investment funds. A fund, before an investment in crypto, will likely have to follow the rules shortly. The regulator released a detailed document on the likely crypto rules, specifying its objectives. It said the new crypto rules are essential for its overall framework for public crypto asset funds.
“The Project’s objective is to review existing requirements, provide guidance, and then implement a regulatory framework relating to Public Crypto Asset Funds that ensures adequate investor protection and mitigates potential risks while providing greater regulatory clarity for product development and management,” said the regulator.
Meanwhile, the new crypto regulations will allow only a few types of particular funds to invest in crypto. It includes non-redeemable investment funds and alternative investment funds. Further, the assets have to be fungible and listed on a registered exchange. Further, other mutual funds can directly invest in these funds to get crypto exposure.
For user protection, the crypto assets must have insurance and be custodied in cold wallets. An accountant will also review the custodian’s internal management annually. The CSA is bullish regarding the project and expects new product developments in the crypto space. At the same time, it said the investment fund regulatory framework will also have risk mitigation measures.
Canada has taken a proactive approach to crypto regulations, balancing innovation with investor protection and financial stability. Its central bank earlier invited opinions in 2023 for a digital Canadian dollar. At the same time, crypto disclosure rules in the country had seen changes in November last year.
Millionero’s blog brings the latest news and trends from the crypto space to you!