The Canadian Investment Regulatory Organization (CIRO) stated that crypto currency funds cannot benefit from low margins, based on volatility, liquidity risks and regulatory uncertainties.

On February 5, CIRO released the List of Securities (LSERM) with low margins. This three -month list states which securities can benefit from low margins. Financial institutions, which comply with low margin rates, can benefit from better capital efficiency and lower trading costs.

In a statement, CIRO, crypto currency funds can not benefit from low margins until the “notification arrives”, he said.

Investors who traded with crypto funds will have to keep higher collaterals; This will cause crypto positions to become more expensive than stock market investment funds (ETFs) and leverage.

Funds subject to higher margin requirements may be exposed to the risk of compulsory liquidation during market decreases, because low margin rates provide a breathing area before the liquidations occur.

According to CIRO, securities with high liquidity, reaching significant market value and with lower volatility are more likely to benefit from low margin rates.

In general, CIRO said that the securities should have price volatility criteria such as 25 %or less the calculated price volatility margin range in order to be appropriate. This criterion measures the volatility by evaluating price fluctuations of securities over a certain period of time.

In addition, the securities must have a market value of at least 2 Canada dollars per share. This requirement allows the securities to maintain the minimum price level; This is usually associated with low volatility.

Beyond the price volatility, securities must meet liquidity criteria in order to gain low margins. This includes conditions such as the fact that the public circulatory value exceeds $ 100 million and the average daily transaction volume every month within the previous quarter is at least 25,000 shares.

For higher priced securities, a daily transaction value of at least $ 1 million canada is required each month.

Finally, the securities must be listed on a Canadian stock exchange and must be considered appropriate for margin for six months.

For the securities listed for less than six months, the market value per share is over 5 Canadian Dollars, the public circulation value is over 500 million Canadian Dollars and a low price volatility is required to be included in a sector known for its volatility.