“The objective of this initiative is to facilitate the ability of those businesses to use innovative products, services and applications all across Canada, while ensuring appropriate investor protection,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “We will consider applications, including for time-limited registrations, on a coordinated and flexible basis to provide a harmonized approach throughout Canada for business models, whether they are start-ups or incumbents. Our ability to regroup and coordinate our involvement and expertise in this busy environment is another example that demonstrates the agility and proactivity of the CSA.”
The CSA regulatory sandbox is open to business models that are innovative from a Canadian market perspective. The CSA said it will assess the merits of each business model, on a case-by-case basis, and businesses that register or receive relief could be permitted to test their products and services throughout the Canadian market.
The CSA provided several examples of potential business models eligible for the Sandbox:
- online platforms, including crowdfunding portals, online lenders, angel investor networks or other technological innovations for securities trading and advising
- business models using artificial intelligence for trades or recommendations;
- cryptocurrency or distributed ledger technology-based ventures; and
- technology service providers to the securities industry, such as non-client facing risk and compliance support services (also known as regulatory technology or regtech).
For anyone interested in applying to the sandbox, you should contact the local securities regulator who will determine if your company is providing a “genuine technological innovation in the securities industry”. As part of the application process, CSA Staff may request live environment testing, a business plan and demonstration of potential investor benefits (as well as how investor risks are minimized).
Local securities regulators can also provide early stage guidance on the application of current securities regulatory obligations, as well as information and support.
Canada has joined a growing list of nations that have launched Fintech Sandboxes to help facilitate financial innovation in an environment where regulators may play a positive role. First launched the UK under the auspices of the FCA, many countries have followed suit including Australia, Singapore, China and more.
|British Columbia||The BCSC Tech Team, at TechTeam@bcsc.bc.ca|
|Alberta||Mark Franko at Mark.Franko@asc.ca or Denise Weeres at Denise.Weeres@asc.ca|
|Saskatchewan||Dean Murrison at email@example.com or Liz Kutarna at firstname.lastname@example.org|
|Manitoba||Chris Besko at email@example.com|
|Ontario||The OSC LaunchPad team at firstname.lastname@example.org|
|Québec||The Fintech Support Team at email@example.com.|
|Nova Scotia||Bill Slattery at William.Slattery@novascotia.ca|