The fund will be managed by Purpose Investments Inc., Cidel Trust Company (a subsidiary of Cidel Bank Canada) will work as its custodian and Winklevoss brother’s Gemini as the sub-custodian.
Canada, Feb 12, 2021 /AlexaBlockchain/ – The Ontario Securities Commission has approved the first North American Bitcoin ETF, making it the first such fund to be listed on any North American stock exchange.
Dubbed Purpose Bitcoin ETF, the fund will be managed by Purpose Investments Inc., Cidel Trust Company (a subsidiary of Cidel Bank Canada) will work as its custodian and Winklevoss brother’s Gemini as the sub-custodian.
Som Seif, Founder and CEO of Purpose Investments, said:
“Bitcoin has been gaining popularity among individual and institutional investors for years now, however it remains a difficult asset to gain efficient and secure exposure to. Purpose Bitcoin ETF will change the landscape for investors by giving them a simple, efficient and affordable way to directly access the cryptocurrency.”
Purpose Investments mentioned in a related press statement that the ETF will be the first in the world to invest directly in physically settled Bitcoin, not derivatives, allowing investors easy and efficient access to the emerging asset class of cryptocurrency without the associated risk of self-custody within a digital wallet. Similar to physically backed gold or silver products, the ETF will always be backed directly by physically settled Bitcoin holdings.
“Bringing the first Bitcoin ETF to the market brought many unique challenges including the requirement of daily liquidity and various mechanisms to satisfy adherence to standards within both traditional ETF markets and the digital asset industry. Bitcoin holdings are kept in “cold storage” – the most secure custody solution in the market. Purpose Investments is proud to be working with Gemini Trust Company, LLC as sub-custodian and CIBC Mellon Global Securities Services Company as fund administrator to provide investors with confidence regarding the safe and effective purchase, settlement, custody of Bitcoin and administration of the ETF,” the company said.
According to the official documents approved on Thursday, it was filed under the Multilateral Instrument Passport System in several Canadian jurisdictions. These territories include British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon and Nunavut.
“A receipt for the prospectus is deemed to be issued by the regulator in each of those jurisdictions if the conditions of the Instrument have been satisfied,” the official document noted.
Purpose Investments worked in close coordination with the Ontario Securities Commission (“the OSC”) through a confidential filing process through a series of meetings and presentations over the course of many months to finalize the launch of the ETF.
Seif praised the Ontario Securities Commission for their willing to work with the company, he commented:
“The OSC was a crucial working partner in the launch of Purpose Bitcoin ETF and we are grateful for their willingness to work with us through this process. Their cooperation and guidance made it possible for us to move forward on getting this novel ETF into the hands of investors.”
The fund is designed to track the market price of Bitcoin but will deduct the fees and expenses of the manager. The fact sheet of the fund detailed that there will be a 1 percent annual management fee along with operating costs and trading expenses, which will be determined later.
Purpose has selected Cidel Trust Company, a subsidiary of Cidel Bank Canada, as its custodian and Winklevoss brother’s Gemini as the sub-custodian.
Bitcoin ETFs are traded on stock exchanges and can be easily bought and sold similar to any other company stock. These instruments cut the technical barrier of investing in cryptocurrencies as anyone can invest in them through brokerages, without needing to worry about wallets and other stuff.
“Investors will incur customary brokerage commissions in buying or selling the ETF Units,” the prospectus stated. “The TSX ticker symbol for the ETF units, CAD ETF Non-Currency Hedged Units, and USD ETF Non-Currency Hedged Units is BTCC, BTCC.B, and BTCC.U, respectively.”
Meanwhile, the Toronto Stock Exchange lists other Bitcoin funds, but those are close-ended, meaning the units can be bought at the initial public offerings (IPOs) and reopenings.
The ETF’s daily NAV will be priced based on the daily spot price of the TradeBlock XBX Index.