CSA Report Highlights Investor Education and Protection Campaigns
The Canadian Securities Administrators (CSA) has published its annual activity report detailing how its Investor Education Committee (IEC) has been educating and protecting Canadian investors locally and nationally.
The CSA’s IEC is comprised of representatives from provincial and territorial securities regulators who aim to help investors make good investment decisions and to recognize, avoid, and report fraudulent investment proposals.
The report, covering national and provincial activities from March 2017-March 2018, indicated activities ranging from television advertising to social media campaigns designed to educate investors on the risks of binary options fraud, scams, digital currency investing, and how to safely approach more traditional investment opportunities.
Better informed financial decisions
“The IEC’s primary goal is to provide a credible and objective voice to help Canadians make better-informed financial decisions,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers, Quebec’s securities regulator.
The vision of the IEC is to help Canadians understand the impact of their financial decisions on their families and future. The CSA also wants Canadians to know they can gain unbiased information from the organization.
This announcement comes after the OSC – Ontario Securities Commission – released the findings of its own study, suggesting that Ontarians are at risk in cryptocurrency due to lack of education.
Bitcoin – HODL on to your hats
Digital currencies feature strongly in the reports headline segment, “Twelve Months on the Frontlines.”
The IEC outlines Bitcoin’s price increase across 2017.
“This surge, along with dozens of other cryptocurrencies, sparked a fast-growing speculation bubble in the once niche virtual currency market,” said the report.
The IEC and its Task Force “began strategizing,” to get the message to Canadians that digital currencies and investment in initial coin offerings (ICOs) is “very risky for the average investor.” The CSA cites reasons of price volatility, questionable regulation, cybersecurity risks including hacking, and the lack of backing from banks or central authorities.
Indeed the CSA released its first clear guidance on how securities laws would apply to ICOs, digital currency investment funds and digital currency exchanges in August 2017.
Notable in the report is an admission by the IEC to having influenced the banning of digital currency and ICO related advertising.
“The IEC and Task Force had some success in influencing the decisions of major online advertisers to consider outright bans on ICO and Crypto ads, due to the high percentage of Pyramid and Ponzi schemes, as well as outright theft,” said the report.
The CSA didn’t reveal which major online advertisers it influenced. However, Facebook, Google, and Twitter all banned digital currency and ICO advertising early in 2018.
One broad activity to educate investors in 2018 is the Cryptocurrency Risk Awareness Campaign which will include infographics, web content, and social media outreach by the IEC. The CSA’s official Facebook page went live in March 2018 and includes news and updates to educate investors as well as alerts on current frauds and scams.
Investor education across the provinces and territories
The report details all provincial and territorial activities conducted over a twelve month period to inform investors of the risks many different types of investment opportunities. It included activities pertaining to digital currencies, as well as how to gain unbiased investment advice and avoid expensive fees.
Canadian regulators, like the CSA and its IEC, are some of the most active in the world, meeting the challenge of the growing digital asset economy. For everyday investors the ability to recognize fraudulent activities is critical to avoid the digital currency and ICO scams that give digital currencies and credible blockchain investment opportunities a poor image.
Education on the risk of any investment is vital to nurture healthy capital markets and allow investors to make informed decisions. As scams are combated with awareness campaigns they will reduce, allowing more credible opportunities to flourish.
Image Credit: St. Patrick’s Catholic Secondary School
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