The Securities Commission granted an exemption to Fidelity Clearing Canada ULC (FCC) and Fidelity Digital Asset Services, LLC (FDAS) from certain provisions of National Instrument 81-102 Investment Funds (NI 81-102). The exemption allows FCC to act as custodian or sub-custodian for crypto assets and related cash of investment funds primarily investing in crypto assets, despite not being an affiliate of a bank or trust company as required by section 6.2 of NI 81-102. Additionally, FDAS, which does not meet the equity requirement of section 6.3, is permitted to act as a sub-custodian for the funds’ crypto assets outside of Canada.
The decision also allows funds to appoint more than one custodian, enabling them to engage FCC for crypto assets and another qualified custodian for other portfolio assets. The relief is subject to conditions, including annual reporting to the principal regulator, maintaining minimum equity, oversight of FDAS by FCC, and ensuring appropriate insurance and risk management policies are in place. The decision expires in two years.