Canadian capital market regulator approves first bitcoin ETF
The Ontario Securities Commission has approved a Bitcoin exchange-traded fund, the first such fund to be listed on any North American stock exchange.
Dubbed Purpose Bitcoin ETF, the fund will be managed by Purpose Investments Inc, according to the official documents approved on Thursday.
It was filed under the Multilateral Instrument Passport System in several Canadian jurisdictions. These territories include British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon and Nunavut.
“A receipt for the prospectus is deemed to be issued by the regulator in each of those jurisdictions if the conditions of the Instrument have been satisfied,” the official document noted.
The fund is designed to track the market price of Bitcoin but will deduct the fees and expenses of the manager. The fact sheet of the fund detailed that there will be a 1 percent annual management fee along with operating costs and trading expenses, which will be determined later.
Purpose has selected Cidel Trust Company, a subsidiary of Cidel Bank Canada, as its custodian and Winklevoss brother’s Gemini as the sub-custodian.
Bitcoin ETFs are traded on stock exchanges and can be easily bought and sold similar to any other company stock.
These instruments cut the technical barrier of investing in cryptocurrencies as anyone can invest in them through brokerages, without needing to worry about wallets and other stuffs.
“Investors will incur customary brokerage commissions in buying or selling the ETF Units,” the prospectus stated.
“The TSX ticker symbol for the ETF units, CAD ETF Non-Currency Hedged Units, and USD ETF Non-Currency Hedged Units is BTCC, BTCC.B, and BTCC.U, respectively,” it added
Meanwhile, the Toronto Stock Exchange lists other Bitcoin funds, but those are close-ended, meaning the units can be bought at the initial public offerings (IPOs) and reopenings.