• Deborah

On September 23, the Investment Industry Regulatory Organization of Canada (IIROC) together with the Canadian Securities Administrators (CSA) issued a Joint Staff Notice 21 – 330 – Guidance for Crypto-Trading Platforms: Requirements relating to Advertising, Marketing and Social Media Use (the ‘Staff Notice’).

The Staff Notice, as its name suggests, aims at ensuring that advertising activities and marketing strategies by Crypto-Trading Platforms (‘CTPs’) comply with securities legislation and take into consideration investor protection.

The Staff Notice advises CTPs to be cautious of the following.

  • False and misleading statements in advertising and marketing materials which are prohibited in securities legislation and IIROC rules. For example, suggesting wrongly that a CTP is registered under securities regulations.

  • Gambling-style contests, promotions or schemes that encourage excessive trading by retail investors and violate their obligations to treat clients fairly, honestly and in good faith.

  • Social Medial use must be subject to compliance and supervisions policies, with the recommendation that CTPs maintain records of business activities, financial affairs, and client transactions.

  • Compliance with securities legislation in general.

The Staff Notice applies to

  • Registered CTPs,

  • CTPs that have or will be applying for registration as a dealer, and

  • Other registrants that may be considering establishing a CTP as a new business line.

Examples of statements that could be considered false or misleading are included in Appendix A of the Staff Notice.

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