As the crypto sector increasingly comes under the regulatory umbrella, the Canadian Investment Regulatory Organization (CIRO) is proposing a new fee model to cover the costs of overseeing trading in the fledgling sector.
On Thursday, the self-regulatory organization published a proposal for introducing fees to recover the costs of crypto market surveillance, which would take effect July 1, 2027, when its interim approach to levying fees for crypto oversight is set to expire.
Under the proposed model, firms are to be divided into one of three categories with minimum annual fees ranging from $50,000 to $100,000 — coupled with specific levies based on firms’ specific trading activity.
According to a notice outlining the proposal, total surveillance costs would first be allocated across the three categories based on the level of oversight required for each category.
“The weighting is based on management’s judgment, informed by resource consumption and risk,” it noted.
After that, costs are to be allocated to individual firms, “based on their respective activity, measured by executed trades and, where applicable, message volumes.”
The proposed model would be phased in, with a transition period running from July 2027 to March 31, 2028, which would initially only aim to recover the direct costs of providing oversight in the crypto sector. After that, it would expand to cover the full costs of regulating the sector.
“This phased implementation is intended to cover the transitional period before the majority of members are expected to be registered and enable proportionate cost recovery among members,” the proposal said.
In the first phase, most firms’ fees are expected to be close to the annual minimum. Currently, the estimated annual costs of crypto oversight is approximately $1 million, it noted.
Firms will be able to get initial estimates of their likely fees from CIRO by submitting their crypto trading volume for the past 12 months.
Comments on the proposal are due by Sept. 28.