This weekend, the Canadian Securities Administrators (CSA) published their Business Plan for 2019-2022 which clearly identifies the rapidly evolving financial industry as a priority with one of their stated strategic goals being to “Respond to technology-related emerging regulatory issues” stemming from “…the growing influence of social media and innovation in distributed ledger technology (DLT), including blockchain.”
The reference to social media appears to refer to the implications of short sellers who maybe active on various platforms and could use their influence to manipulate the direction of individual crypto-assets or the larger market.
Harmonised Nationwide Regulatory Approach
The CSA is an organisation consisting of securities regulators of the 10 provinces and 3 territories of Canada whose primary responsibility is developing a harmonised approach to regulation throughout the country. In streamlining the regulatory process by eradicating duplication of work, the CSA claims to help “…companies seeking to raise investment capital and others working in the investment industry.”
To facilitate this aim, the CSA had previously introduced a Regulatory Sandbox allowing fintech businesses to enjoy a period of time in which to test products and services before adhering to full securities laws requirements.
Earlier this year, the CSA, working alongside the Investment Industry Regulatory Organisation of Canada (IIROC), published a consultation paper regarding regulating crypto-asset platforms.
Under the new Business Plan, the CSA have shown that DLT and blockchain are viewed as significant developments and they will “…consider the current regulatory framework to address the unique challenges brought by crypto-assets…”
As well as focusing on short sellers, including those active on social media, the CSA intend to:
- Propose a regulatory regime for crypto-asset trading platforms
- Consider custodial requirements in relation to crypto-assets
- Consider capital raising and issues in relation to blockchain-based securities
Despite the clear intentions, it remains to be seen whether the CSA Business Plan is flexible, robust or even feasible enough to stay relevant with the fast-moving technologies that often operate on a global rather than a national level.
