Ontario Securities Commission Aims To Regulate Blockchain Industrybr>
The Ontario Securities Commission (OSC) has stated that cryptocurrency and blockchain related developments will be one of its key areas of focus for the next fiscal year.
The Ontario Securities Commission is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario.
In its 2018-2019 Draft Statement of Priorities, the OSC said that it will continue to foster new ways to raise capital and invest while focusing on potential investor protection issues arising from cryptocurrency and blockchain-related developments. It intends to advance key investor protection measures, including publishing reforms that address the best interests of the client and defining actions on embedded commissions.
“FinTech is leveraging new technology and creating new business models in the financial services industry, such as providing new product offerings (blockchain-based cryptocurrencies) and disrupting service channels (online advisors),” the OSC said. “This innovation is driving more complexity in financial markets and products and creating a risk that consumers may not understand what they are buying. Initial offerings of digital currency and similar instruments can raise fundamental issues about the scope of securities regulation at the same time that they present significant investor protection issues.”
The OSC has made it clear that it does not intend to stifle innovation and industry growth with over-regulation: “The OSC will pursue initiatives to address regulatory burden for public companies and investment funds.”
As part of the OSC’s goal to keep regulation in step with digital innovation, the OSC will undertake initiatives to support the evolution of FinTech businesses in Ontario. The commission said they will continue to identify issues and potential regulatory gaps arising from cryptocurrency, initial coin offering and blockchain by monitoring businesses in the space. They will also engage with the blockchain community to better understand their needs and help them understand the regulatory requirements that apply to their businesses.
“We are pursuing an ambitious regulatory agenda that is responsive to our evolving capital markets,” said Maureen Jensen, Chair and CEO of the OSC. “We will continue to support FinTech innovation, advance measures to better protect investors, and initiate projects to lighten the regulatory load for businesses.”
In October 2016, the OSC created LaunchPad to actively engage with the FinTech community and to provide support in navigating regulatory requirements. LaunchPad provides a forum to discuss proposed approaches, raise questions and educate FinTech businesses about the regulatory requirements for which registration and/or exempt relief may be needed.