The Securities Commission granted Fidelity Clearing Canada ULC (the Filer) time-limited relief from prospectus and trade reporting requirements, allowing it to distribute Crypto Contracts to permitted clients. This decision revokes a prior decision and is valid for two years. The relief is subject to conditions including disclosure and reporting requirements to foster innovation while ensuring investor protection and market efficiency.
Key Facts:
– The Filer is registered as an investment dealer and a member of CIRO.
– The Filer offers services involving the custody and trading of Crypto Assets through Crypto Contracts.
– The Filer uses Fidelity Digital Asset Services, LLC (FDAS) and other liquidity providers for custody and trade execution.
– The Filer ensures compliance with CIRO rules and conducts due diligence on Crypto Assets and liquidity providers.
Reasoning:
– The decision aims to balance innovation in the Canadian capital markets with regulatory mandates for investor protection and market fairness.
– The Filer’s operations are tailored to specific facts and circumstances, and this decision is not a precedent for other filers.
Outcome:
– The Filer is granted relief from prospectus and trade reporting requirements for two years, subject to conditions including:
– Maintaining registration and CIRO membership.
– Providing services only to specified clients.
– Ensuring FDAS or other acceptable custodians hold client Crypto Assets.
– Delivering risk and asset statements to clients.
– Reporting quarterly to the Principal Regulator and Coordinated Review Decision Makers.
Relevant Laws and Regulations:
– Securities Act, R.S.O. 1990, c. S.5, ss. 1(1), 53 & 74.
– Multilateral Instrument 11-102 Passport System, s. 4.7.
– OSC Rule 91-506 Derivatives: Product Determination, ss. 2 & 4.
– OSC Rule 91-507 Trade Repositories and Derivatives Data Reporting, Part 3.