The British Columbia Securities Commission (BCSC) has granted blockchain firm First Block Capital registration as an investment fund manager. First Block Capital is Canada’s first registered investment fund manager and exempt market dealer devoted to cryptocurrency investing.
The BCSC is the independent provincial government agency responsible for regulating securities trading in British Columbia through the administration of the Securities Act.
Earlier in July, First Block Capital launched the first Canadian Bitcoin Trust (CBT), an open-ended unit trust that invests only in bitcoin based on a purely passive investment strategy. The fund enables investors to get exposure to the price of bitcoin without having to worry about buying and securing the cryptocurrency.
The BCSC reviewed First Block Capital’s application and determined that the company complies with the necessary regulations under the securities law requirements. Upon request, First Block Capital was also granted an exemption from complying with certain regulations as a market dealer.
The conditions of registration imposed on First Block Capital allow the company to operate under the present regulatory framework, while allowing regulators to evaluate the identified risks of this new type of investment fund.
Earlier this year, the BCSC launched a Tech Team as part of its FinTech outreach initiative to help B.C.-based FinTech and technology companies understand their securities regulatory requirements. The Tech Team is also actively involved with the Canadian Securities Administrators’ Regulatory Sandbox Initiative, which supports FinTech businesses seeking to offer innovative products, services and applications in Canada.
Zach Masum, the leader of the BCSC’s Tech Team, said that cryptocurrency investments are a new and novel form of investing in Canada. He added that they have seen from the market and from investors that there is a strong appetite for access to these kinds of investments. This first registration, he said, allows access to bitcoin investments, while providing the BCSC with unique mechanisms to monitor operations in a rapidly developing area.
“We strongly encourage other companies in British Columbia, whether they are potential new registrants or existing investment fund managers, to contact the BCSC’s Tech Team if they are considering pursuing cryptocurrency investments in their funds,” said Masum. “The Tech Team can help ensure compliance with securities regulation, which can help save time and potential costs later on.”
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