Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
CSA Consultation on New Canadian ETF Rules
Consultation | June 20, 2025
Image: Freepik
CSA Looks to Update ETF Rules to Protect Investors and Increase Transparency
On June 19, 2025, the Canadian Securities Administrators (CSA) published Consultation Paper 81-409, proposing to modernize ETFs and how they are regulated in Canada, and is soliciting feedback.
ETFs are one of the most popular investment products in the country. Last year, Canadians invested $518 billion in ETFs, which represents about 19% of all publicly offered fund assets in Canada. Retail investors held around 62% of those ETF assets, according to the OSC ETF Study cited in the paper.
See: CSA Pauses Climate and Diversity Disclosure Rules
The CSA began reviewing ETF rules in 2023 to see whether the current approach still works. The review focused on key ETF features such as the way ETF units are created or redeemed by authorized dealers, how ETFs trade on exchanges, and how the price of ETF units compares to the value of their underlying investments. The CSA also considered recent international standards published by IOSCO, the global body of securities regulators.
Stan Magidson, Chair of the CSA and Chair and CEO of the Alberta Securities Commission:
“ETFs are an increasingly important investment vehicle for Canadians. This consultation will provide the CSA with important insights into the unique regulatory considerations for these products.”
Key Proposals for Consultation
- Require ETF managers to follow written procedures for issuing and cancelling units, including how asset baskets are built, when custom baskets are allowed, and how conflicts of interest with dealers are managed
- Mandate ETF websites to publish daily price and trading data, such as the difference between market price and net asset value (NAV), bid-ask spreads over the past 30 days, and historical charts showing price alignment with the fund’s holdings
See: CSA Expands LIFE Exemption to Boost Public Capital Raising
- Require managers to actively monitor trading performance to ensure prices, spreads, and dealer activity are supporting fair and efficient trading
- Make authorized participant contracts public. These are the dealers that create or cancel ETF units, and their agreements would need to be filed and summarized in official ETF documents
- Seek feedback on whether every ETF should have at least two authorized dealers to prevent overreliance on a single firm, especially during market stress
The CSA is also seeking feedback on how Canadians investors access U.S. listed ETFs, either directly through broker-dealer platforms or indirectly through Canadian ETFs that hold foreign-listed funds.
Conclusion
More Canadians are using ETFs to invest in everything from stocks and bonds to commodities and global markets. These proposed changes are designed to protect investors, improve transparency, and support competition by making sure the rules reflect how ETFs actually work today.
See: CSA Seeks Industry Input on Data Portability Consultation
The CSA is seeking input from investors, industry participants, and other stakeholders to modernize and update future ETF regulation in Canada. Comments are due by October 17, 2025.
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
 |  |  |
|---|---|---|
 |  |  |
Leave a Reply