The Ontario Securities Commission (OSC), the Autorité des marchés financiers (AMF) and the Canadian Investment Regulatory Organization (CIRO) (the Canadian Securities Regulators), have granted approval for Project Samara, an experimental tokenization research project conducted by a consortium that includes RBC Dominion Securities Inc., a member of RBC Capital Markets (RBC), RBC Investor Services Trust, the TD Securities division of the Toronto Dominion Bank, TD Securities Inc., the Bank of Canada (BoC), and Export Development Canada (EDC) (the Consortium).
Project Samara will evaluate a platform operated by RBC that uses distributed ledger technology to support end-to-end transactions throughout the bond lifecycle, including “tokenized” bond issuance by EDC, bidding, coupon payment, redemption, secondary trading, in addition to the settlement of bond trades using digital representations of wholesale Canadian dollars created and managed by the BoC on the distributed ledger. The Consortium will publish the key findings in a research report assessing the benefits of issuing and trading bonds using distributed ledger technology.
The Canadian Securities Regulators have granted the Consortium novel exemptive relief to allow Project Samara to proceed. The relief was granted through the OSC LaunchPad, allowing the consortium to conduct research into tokenization. LaunchPad is a support program of the OSC’s Innovation Office that assists businesses with new products, services, or applications that benefit investors.
There is a growing international consensus among regulators that they must harmonize regulatory policies towards tokenization, while simultaneously managing the risks and unlocking the benefits of the new technology. Financial institutions and asset managers are launching tokenized products, while central banks and regulators are exploring new ways to support innovation while protecting investors and safeguarding financial stability.
The Canadian Securities Administrators (CSA) have also been active in this area, recently launching Project Tokenization, a new theme in its CSA Collaboratory. This initiative aims to collaborate with stakeholders to examine issues arising from the use of tokenized products and their intersection with Canadian securities laws, supporting informed, coordinated responses to innovation in the capital markets.
Decision: in the matter of RBC Securities is available for download from the websites of the participating jurisdictions.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
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