The first registration of a fund manager to operate a bitcoin investment fund in Canada has been approved by the British Columbia Securities Commission. First Block Capital Inc is also registered as an investment fund manager and exempt market dealer in Ontario.
Bitcoin Fund Manager’s Registration Approved
The British Columbia Securities Commission (BCSC) announced on Wednesday “the first registration of an investment fund manager in Canada solely dedicated to cryptocurrency investments.” The announcement read:
The BCSC has granted First Block Capital Inc. registration as an investment fund manager and an exempt market dealer in order to operate a bitcoin investment fund.
Canadian investment firm First Block Capital announced the launch of the country’s first bitcoin trust in July. “The Canadian Bitcoin Trust is an open-ended unit trust that enables investors to get exposure to the price of bitcoin without having to worry about buying and securing bitcoin, which has been a challenge for investors,” said co-founder Sean Clark at the time.
The trust can be accessed through funding portal Frontfundr. “The only investments of the Trust will be direct investments in bitcoin,” its listing page describes. Xapo Ltd is listed as the custodian.
Initiative to Attract Crypto Fund Managers
In January, the BCSC launched the Tech Team as part of its fintech outreach initiative to support fintech businesses seeking to offer innovative products, services and applications in Canada.
Zach Masum, leader of the Tech Team encourages potential new registrants or existing fund managers to contact his team “if they are considering pursuing cryptocurrency investments in their funds.” He noted that “the Tech Team can help ensure compliance with securities regulation, which can help save time and potential costs later on.” Commenting on Wednesday’s announcement, he said:
Cyptocurrency investments are a new and novel form of investing in Canada. We have seen from the market and from investors that there is a strong appetite for access to these kinds of investments. This first registration allows access to bitcoin investments, while providing the BCSC with unique mechanisms to monitor operations in a rapidly developing area.
“The conditions of registration imposed on First Block Capital were crafted to give flexibility to allow them to operate under the present regulatory framework,” the Commission detailed, adding that it will give them tools “to evaluate the identified risks of this innovative fund type.”
Provincial Regulatory System
In Canada, securities regulation is independently managed by its 13 provincial and territorial governments, with each having a securities commission or equivalent authority.
There is no regulatory authority at the federal government level. However, the majority of the provincial security commission operates under a passport system, meaning the approval of one commission can easily translate to the others with simple filings. Every province and territory in Canada is part of the passport system except the country’s largest capital market, Ontario.
Concerns over the provincial regulatory system have prompted the federal government to work on establishing a national securities regulatory system. The national regulator is expected to be introduced by June 30, 2018.
The BCSC revealed in Wednesday’s statement that “First Block Capital is also now registered as an investment fund manager and exempt market dealer in Ontario; the BCSC is its principal regulator.”