Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
OSC Opens Door for Tokenized Long-Term Funds
Capital Markets | May 30, 2025
Image: Freepik/rawpixel.com
New Fund Model Could Bring Tokenized Infrastructure to Retail Investors
The Ontario Securities Commission (OSC) LaunchPad announced on May 29, 2025, that they are establishing the groundwork for a new generation of investment products for retail investor access. The focus is on long term asset exposure for everyday investors, which could very well include an innovative structure like tokenized funds.
See: What the 2025 Throne Speech Means for Fintech and Growth
The OSC’s “Long-Term Asset Fund Project” is supporting the development of investment fund products that offer retail exposure to traditionally inaccessible assets classes, such as venture capital, private equity, private credit, infrastructure, and natural resources (mining, forestry, energy etc). The regulator is calling on industry stakeholders to propose fund models that may require exemptive relief, while maintaining investor protection measures.
Grant Vingoe, CEO OSC:
“The investment landscape is shifting, and retail investors are increasingly looking to diversify their portfolios. The LaunchPad project is supporting new and innovative financial products that can enhance market efficiency and provide new opportunities for investors.”
Opportunity for Tokenization Fund
The OSC’s focus on alternative assets and flexible fund design makes this particularly relevant for blockchain-based tokenized funds. Tokenization is the issuance of fund units as digital securities on a blockchain, with programmable compliance, transparent ownership records, and fractional investment opportunities for retail investors.
See: OSC Green Lights Kraken’s Restricted Dealer Status
A tokenized OLTF (Ontario Long-Term Asset Fund) model could take the form of a closed-end or interval fund:
- Uses smart contracts to manage redemptions, enforce eligibility rules, and automate reporting
- Onboarding and compliance functions like KYC and investor accreditation can be embedded directly into the token issuance and transfer process
- This structure reduces administrative burden while improving oversight, still a key priority for regulators
From an investor standpoint, tokenization makes it easier to own smaller, fractional interests in long-term projects such as clean energy infrastructure, real estate developments, or later stage venture funds. Guardrails can be built-in to manage liquidity, restrict transfers, and redemption windows that match the underlying assets.
Outlook
This is a signal and actionable opportunity for regulated digital asset investment in Canada. Unlike typical sandbox programs, this LaunchPad effort is tied directly to new product implementation and could be a key opportunity to bring real retail access for tokenized long-term assets to Canada. The OSC will evaluate proposed exemptive relief frameworks.
See: Responding to U.S. Financial Risk with Canadian Strength
Done right, a tokenized fund for long term assets could capitalize intensive projects that fuel economic growth while providing retail investors a chance to participate. NCFA members can get in touch with the LaunchPad initiative to discuss: mtang@osc.gov.on.ca.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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