For crypto infrastructure providers the introduction of new investors protection standards will clarify the position and requirements of regulators toward crypto assets due-diligence before they are sold and promoted to investors, as well as investors rights and management responsibilities in case of intentional scam projects and coins offering.
The OSC recently published for comment its Draft Statement of Priorities. The draft includes 14 priority areas the OSC plans to focus on next fiscal year.
The document sets out the priority actions that the OSC will take in 2018-2019 to address each of the goals and its related priorities. While the proposed priorities will potentially impact more than one organizational goal, each priority is identified only under the specific goal where the greatest impact is expected. In certain cases, the process required to properly assess the issues, including consultations with market participants, and to develop and implement appropriate regulatory solutions, may take more than one year to complete.
The OSC will continue to stimulate new ways to raise capital and invest while focusing on potential investor protection issues arising from cryptocurrency and blockchain-related developments. The OSC also intends to advance key investor protection measures, including publishing reforms that address the best interests of the client and defining actions on embedded commissions. Additionally, the OSC will pursue initiatives to address regulatory burden for public companies and investment funds.
The draft includes thirteen priorities from the OSC’s 2017-2018 Statement of Priorities, which are moving into the next phase of work, as well as a new priority related to workforce strategy. The priorities align with the OSC’s five regulatory goals to deliver strong investor protection, deliver effective compliance, supervision and enforcement, deliver responsive regulation, promote financial stability through effective oversight and be an innovative, accountable and efficient organization.
The Draft Statement of Priorities is available on the OSC’s website. Stakeholders are invited to provide written comments on the draft by May 28, 2018.
Currently, just few blockchain-powered companies like HighCastle, which tokenize investments to enable cross-border and crypto investments, are following the existing regulatory requirements and compliance toward the promotions and sale of tokenized securities. With HighCastle SmartNotes solution, startups and corporations can issue and sell their security tokens, while investors can buy and sell worldwide private securities easily, considering that listed companies are gone through dual-diligence conducted by HighCastle, or its regulated providers.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in the capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.gov.on.ca.