Summary: Canada’s top financial regulator, CIRO, just made a big call—crypto funds won’t be getting reduced margin rates anytime soon. That means investors will need to put up more security to trade crypto compared to stocks and ETFs. The reason? CIRO says it’s all about managing volatility, liquidity risks, and keeping up with regulations.
CIRO dropped its quarterly List of Securities Eligible for Reduced Margin (LSERM), basically a VIP list of assets that get better trading perks. But crypto? Yeah, it didn’t make the cut. That means trading crypto funds just got pricier, as investors need to hold more capital upfront. Stocks and ETFs still get to enjoy lower margin rates, making them a safer bet for traders looking to stretch their dollars.
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CIRO has some strict rules for securities to qualify. Assets need to be highly liquid, have a steady price, and meet a public float of at least CA$100 million. Plus, they should have 25,000 shares traded per month. Crypto funds don’t check enough of those boxes, so they’re left out “until further notice.”
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Basically, if you’re trading crypto in Canada, you’ll need deeper pockets.This makes it even more difficult for investors to stay in their positions if the markets decline. It is also indicative of how regulators in Canada are treading the careful path in relation to crypto: applying old rules and watching their new, digital versions closely.
