The Ontario Securities Commission released OSC Staff Notice 33-749 Annual Summary Report for Dealers, Advisers and Investment Fund Managers on August 23, 2018 (Staff Notice).

The Staff Notice included, at Part 1.3, a review of the recent activities of the OSC LaunchPad.  The LaunchPad is actively engaged with novel fintech businesses providing support in navigating regulatory requirements.  The Staff Notice highlighted the following key accomplishments of the OSC LaunchPad in fiscal 2017-2018:

  • 242 Meetings with fintech businesses and stakeholders
  • 156 requests for support received and direct support provided to fintech businesses
  • 55 events hosted by the OSC LaunchPad or in which it participated
  • 25 collaborative reviews with the Canadian Securities Adminstrators’ Regulatory Sandbox regarding novel business models that want to operate across Canada.

Although the industry was initially focussed on online advisors, online lenders and crowdfunding portals, OSC Staff advised in the Staff Notice that industry focus has largely shifted to cryptoasset-related businesses, including initial coin and token offerings, cryptoasset investment funds, traditional financial service businesses utilizing blockchain technology and crypto asset trading platforms.  In addition, the OSC Launchpad is seeing businesses focussed on RegTech services, technology-based compliance solutions and data analytics services.


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As ICO regulatory landscape gradually takes shape, Kik Interactive excludes Canadians from Kin token sale

On September 7, 2017, Kik Interactive Inc. (Kik), a Waterloo-based digital messaging company, announced that it would not permit Canadian investors to purchase its “Kin” crypto-tokens in its currently ongoing public sales process. Kik had previously announced plans to sell up to U.S.$125 million of Kin tokens, including to Canadians. Kin tokens are envisioned as a general purpose cryptocurrency for use in services such as chat, social media, and payments, all within the Kin ecosystem.

The announcement was made in a blog post by Kik Chief Executive Officer Ted Livingston, who cited “weak guidance” from the Ontario Securities Commission (OSC) regarding whether Kin tokens are securities as the reason for banning Canadians. The OSC later clarified to the National Post that they had reviewed the Kin token and concluded that it is a security, but that they were willing to grant Kik exemptive relief from certain securities law requirements provided additional protections were granted to retail investors.

While Kik’s submissions to the OSC and the details of the OSC’s conclusion are not public, the OSC’s conclusion nevertheless provides some regulatory guidance at a time when industry participants are eager to determine precisely when tokens will be subject to securities laws. Another example of such guidance was provided in the case of Impak’s MPK tokens, which are designed to allow holders to purchase goods and services from like-minded merchants operating within the “impact” economy. Similar to Kin, the MPK tokens are considered a security, in this case by both the Autorité des Marchés Financiers in Quebec (AMF) and the OSC.


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By a press release issued March 8, 2017, the Ontario Securities Commission (OSC) warned businesses that use distributed ledger technologies (DLT), such as blockchain, as part of their financial products or service offerings that they may be subject to Ontario securities law requirements.

The OSC noted that businesses are using DLT in a variety

apple-1853306_1280On March 6, 2017, the Ontario Securities Commission issued a white paper titled “Insights from Canada’s first regulatory hackathon”.  The paper provides an overview of the RegHackTO hackathon hosted by the OSC on November 25-27, 2016.   At the event, more than 120 members of the fintech community competed to find solutions to regulatory problems in

toronto-73565_1280On February 23, 2017, the Canadian Securities Administrators (CSA), the umbrella organization of Canada’s provincial and territorial securities regulators, launched a regulatory sandbox initiative to support businesses seeking to offer innovative products, services and applications including:

  • online platforms, including crowdfunding portals, online lenders, angel investor networks or other technological innovations for securities trading and advising;

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On January 18, 2017, the United States Financial Industry Regulatory Authority (FINRA) released for comment a report titled Distributed Ledger Technology: Implications of Blockchain for the Securities Industry.

The report provides a helpful overview of distributed ledger technology (DLT) which FINRA describes as involving a distributed database maintained over a network of computers connected

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The Ontario Securities Commission (OSC) announced today its new initiative, OSC LaunchPad, described as the first dedicated team by a securities regulator in Canada to help fintech businesses navigate securities law requirements and accelerate time-to-market.

OSC LaunchPad will provide direct support to eligible new and early-stage fintech businesses through meetings with the OSC LaunchPad