The Ontario Securities Commission (OSC) has granted an exemption to OANDA (Canada) Corporation ULC (the Filer) from the prospectus requirement for the distribution of contracts for difference (CFDs) and over-the-counter (OTC) foreign exchange contracts to investors in certain Canadian jurisdictions. The Filer is an investment dealer registered across Canada and a member of the New Self-Regulatory Organization of Canada (New SRO).
The exemption is subject to several conditions, including compliance with New SRO rules and acceptable practices, and the provision of a clear and plain language risk disclosure document to investors prior to their first CFD transaction. This document must be substantially similar to the risk disclosure required for recognized options and the regime for OTC derivatives as outlined in OSC Rule 91-502 and the proposed but not adopted OSC Rule 91-504, as well as the Quebec Derivatives Act.
The Filer’s CFD offerings will be executed on an automated trading platform, with the Filer acting as the counterparty. The CFDs will not be transferable, and the Filer will not act as an intermediary or provide trading advice. The Filer will manage risk through a hedging strategy and is compensated through the bid-ask spread.
The exemption aligns with the OSC’s view that the prospectus requirement may not be suitable for certain derivative products and that alternative requirements based on risk disclosure may be more appropriate. The relief is consistent with the approach taken in Quebec under the QDA and with international practices for similar financial products.
The exemption is granted for a four-year period, subject to revocation under certain conditions, such as regulatory actions that affect the Filer’s ability to offer CFDs. The Filer must also inform the OSC of any material changes to its business or any disciplinary actions taken against it by regulatory authorities.
The decision is based on the Securities Act, R.S.O. 1990, c. S.5, as amended, and related OSC rules and policies, including OSC Rule 91-502, OSC Rule 91-503, and OSC Staff Notice 91-702. The Existing Relief previously granted to the Filer has been revoked as part of this decision.