The Canadian Securities Administrators (CSA) has published for a 90-day comment period ending April 17, 2024, Proposed Amendments to National Instrument 81-102 Investment Funds Pertaining to Crypto and proposed changes to Companion Policy 81-102CP Investment Funds (81-102CP) (the Proposed Amendments). The Proposed Amendments concern reporting issuer investment funds investing directly or indirectly in crypto assets (Public Crypto Asset Funds).

Substance and Purpose

The Proposed Amendments set out proposed regulatory requirements aimed at protecting investors and reducing investor risk in public investment funds investing in crypto assets. They include crypto asset investment restrictions and custodial obligations.

The Proposed Amendments are the second phase of a project to implement a Canadian regulatory framework for public investment funds holding crypto assets. They cover key operational matters, such as:

  • criteria regarding the types of crypto assets that Public Crypto Asset Funds are permitted to purchase, use, or hold;
  • restrictions on investing in crypto assets by Public Crypto Asset Funds or other types of reporting issuer investment funds; and,
  • requirements concerning custody of crypto assets held on behalf of a Public Crypto Asset Fund.

The Proposed Amendments are expected to codify practices of existing Public Crypto Asset Funds. They were developed mainly through the prospectus review process, as well as codifying exemptive relief previously granted to existing Public Crypto Asset Funds.

Stakeholders are invited to provide comments in writing on or before April 17, 2024.

CSA Notice and Request for Comment – Proposed Amendments to National Instrument 81-102 Investment Funds Pertaining to Crypto Assets is available for download from CSA members’ websites.

For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.

This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.