The Ontario Securities Commission (OSC) put up a press release on Wednesday (March 8th) containing cautionary advice against use of Distributed Ledger Technology or commonly the blockchain.1
In the press release OSC advises businesses using blockchain to offer securities, falling under the Ontario Securities Act, to consider registration as a dealer, adviser and/or investment fund manager.
“Many uses of distributed ledger technologies have the potential to increase transparency and efficiencies in our capital markets, and we are keen to support this type of innovation,” said Pat Chaukos, Chief of OSC LaunchPad. “Because this is a novel area, businesses may not be aware that some uses of this technology could trigger securities law requirements. We encourage these businesses to speak with us about securities law and investor protection requirements that may apply.”
Blockchain introduces the triple entry accounting system which is the latest innovation in accounting practices. This can be used as the underlying technology in trading, clearing and settling securities transactions.
Companies may also issue shares in digital tokens which can be traded over the internet using the blockchain technology.
The law remains neutral to the technology and is equally applicable on all use cases of blockchain on securities transactions.