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Homepage > News > Business > Canada removes digital asset funds from reduced margin eligibility Digital asset funds are no longer eligible for reduced margin exemptions in Canada under the country’s latest quarterly list. The Canadian Investment Regulatory Organization recently updated the List of Securities Eligible for Reduced Margin (LSERM), with digital asset funds the notable exclusion. “Until further notice, cryptocurrency funds are not eligible for reduced margin. This eligibility status also applies to cryptocurrency funds against which OCC options are traded. For cryptocurrency funds, margin eligibility may be otherwise determined according to [other requirements],” CIRO’s guide now states. In Canada, the LSERM lists securities that regulators allow a reduced margin rate of 25% for inventory positions and 30% for client positions. Updated quarterly, the list only accepts securities listed on the Toronto Stock Exchange and its sister company Venture Exchange (TSXV), Cboe Canada and the Canadian Securities Exchange. Eligibility criteria include a price volatility margin lower than 25%, over $70 million in public float and over $750,000 in daily trading volume in a given quarter. The security must also be listed on a Canadian exchange for at least six months. While digital assets meet all the other criteria, their volatility was deemed excessive for the LSERM. Digital assets’ delisting will impact trading in Canada as investors have a smaller pool of funds to borrow from for margin trading, translating into higher upfront capital to trade. In turn, this leads to lower liquidity and a higher likelihood of big trades causing price swings. Higher margin requirements also mean that digital asset traders are more likely to face forced liquidations in the event of a market dip, as the wiggle room is much smaller. Canada’s tightening digital asset regulations Like many other major economies, Canada has been paying closer attention to…

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Filed under: News - @ February 11, 2025 12:24 pm