KPMG’s global Evolving Asset Management Regulation 2025 report (EAMR) signals a decisive shift: regulators are moving from rule-making to enabling growth, competition, and innovation, while intensifying their focus on investor protection and operational resilience. For Canadian asset managers, this means stronger support for new products, accelerated digital asset adoption, and streamlined, digital-first disclosures, paired with heightened conduct standards and anti-greenwashing enforcement.
Canada’s 2025 federal budget signals a clear intent to modernize Canada’s financial ecosystem - stablecoin oversight, open banking, and related tax measures will reshape how asset managers structure new products and manage compliance. Those who proactively manage these changes now will be best positioned to maintain competitiveness and ensure compliance in an increasingly evolving regulatory environment.
From a Canadian perspective, several key regulatory themes emerge:
- Retailization of private assets: Expanding retail access to private markets while managing liquidity, valuation, and distribution risks
- Digital innovation, fast but safe: Canada has taken an early lead on “exotic” and digital exposures (such as crypto-linked ETFs) and is now aligning AI governance and tokenization frameworks with global best practices
- Disclosure modernization at scale: The Total Cost Reporting (TCR) regime launches January 1, 2026, prompting firms to overhaul data infrastructure and rethink investor communications beyond mere compliance
- ESG recalibration: Canada is refining its ESG approach, balancing international standards with domestic realities, and prioritizing anti-greenwashing enforcement and practical, transparent disclosures.
In this article, we will explore how these themes and evolving regulations will shape the Canadian asset management landscape, and how industry leaders can leverage them to ignite growth.
Retail access to private assets: Global momentum, Canadian opportunity
Internationally, regulators are refining how retail investors can access private assets, with Europe’s ELTIF and the UK’s LTAF setting new standards for transparency and risk management. In Canada, the Ontario Securities Commission’s proposed Ontario Long Term Fund and the CSA’s ongoing liquidity reviews signal a cautious but progressive approach to opening private markets to retail investors.
Feedback on Ontario’s consultation has been mixed. Investor advocates have raised concerns about liquidity and whether retail investors fully understand the risks, while private market participants highlight the potential for long-term returns, further diversification, and access to an asset class traditionally reserved for institutional and high net-worth investors.
Everyone is in a race, not just in Canada, but around the world to package up products that were traditionally available only to long-term private capital investors and make them accessible to the everyday investor.
The federal budget’s $1 billion Venture and Growth Capital Catalyst Initiative over three years demonstrates federal support for high-growth companies and new, emerging fund managers. This investment recognizes asset management as a driver of innovation and economic resilience, and signals new opportunities for managers willing to adapt and innovate in private markets and alternative investments. Canadian asset managers should leverage this momentum to develop innovative retail products and strengthen their position in the evolving private asset landscape. For Canadian asset managers, the message is clear: structural risks like liquidity, valuation, distribution, and tax must be addressed in the product design, not left to post-sale support. This means building in clear redemption terms, ensuring independent and frequent valuations, tightly defining the target market, and resolving cross-border tax issues up front.
The way fund structures have to adapt for retail access is much more complex than just sticking a new entity on top, it’s about balancing liquidity, tax, and regulatory requirements both in Canada and abroad.
The next 12 to 18 months will be critical for managers to stress-test their fund structures, strengthen governance, and advance investor education, ensuring that new retail products deliver both opportunity and protection.
Digital innovation, including AI, tokenization, crypto: Move fast, govern faster
Canada’s asset management sector is embracing digital innovation, but with a strong focus on governance and investor protection. Regulators have made it clear that AI, tokenization, and crypto products must operate within existing securities laws, emphasizing transparency, oversight, and responsible use.
The 2025 federal budget marks a significant milestone for digital asset management in Canada, introducing the country’s first national regulatory framework for fiat-backed stablecoins. Administered by the Bank of Canada under the Retail Payment Activities Act, this framework requires issuers to maintain full reserves, implement robust risk management, and guarantee redemption policies. Alongside this, the budget advances payments modernization and open banking, expanding access for fintechs and streamlining oversight for payment service providers. For asset managers, these developments reinforce the need to build strong governance frameworks for digital products and position Canada as a leader in responsible digital innovation.
Digital transformation has the potential to materially inform asset management operations, but success depends on building trust through robust governance, clear disclosure, and a commitment to investor interests & outcomes.
On the AI front, Canadian regulators expect firms to use technology in ways that are explainable and well-supervised, with human oversight built in. The goal is to harness AI for efficiency and better client service, while ensuring that marketing and investment decisions remain transparent and fair.
Canada is also watching global leaders in fund tokenization, such as Singapore and Luxembourg, who are setting standards for secure, interoperable digital products. These frameworks offer useful blueprints for Canadian managers as demand for tokenized funds grows.
When it comes to crypto, Canada was among the first to approve spot crypto ETFs, giving retail investors regulated access to digital assets. However, most institutional mandates remain cautious, and managers continue to face challenges around tax treatment and transaction tracking. The 2025 federal budget also noted the government’s intention to proceed with the crypto-asset reporting framework and related updates to the common reporting standard in the future, which may further impact fund managers.
Looking ahead, Canadian firms should focus on building strong governance frameworks for AI, piloting tokenized fund processes, and ensuring that any crypto exposure is well-aligned with investor needs and regulatory requirements. The message is clear: move quickly to innovate, but always keep investor protection and regulatory compliance at the core.
Modernizing disclosures: TCR is a catalyst, not the finish line
Starting January 1, 2026, Canadian asset managers and dealers will be required to provide clients with a clear breakdown of fund costs through the new TCR regime. This initiative is designed to bring greater transparency to investment fees and expenses, helping investors better understand the true cost of their portfolios.
While the industry broadly supports the move toward transparency, many firms are grappling with the operational challenges of integrating new data flows and reporting standards, especially when it comes to foreign-listed funds and ETFs.
The most significant impact for managers is the operational lift required to implement these new reporting requirements. It’s not just about compliance, it’s about making sure the data is accurate and meaningful for investors.
To meet these new standards, firms are investing in centralized data networks and automation to streamline cost reporting and reduce errors. The focus is shifting from simply meeting regulatory deadlines to enhancing the investor experience, making cost disclosures more useful, accessible, and relevant.
To further empower investors and increase competition, the 2025 federal budget proposes eliminating transfer fees for investment and registered accounts, making it easier for Canadians to switch providers. Additionally, new open banking legislation will facilitate data sharing and consumer-driven banking, supporting greater transparency and competition in financial services. These measures complement the upcoming TCR regime and reinforce the importance of transparent, digital-first communications for asset managers.
Looking ahead, Canada has the opportunity to build on TCR by further simplifying disclosures, leveraging digital tools, and making investor communications even more intuitive. By modernizing their data and reporting infrastructure, firms can turn regulatory change into a competitive advantage and set a new standard for transparency in the global asset management industry.
ESG recalibration: Quiet consistency
The ESG landscape is shifting from building new frameworks to refining existing rules, with a strong focus on fund naming, marketing, and anti-greenwashing enforcement. Globally, regulators are tightening standards and simplifying disclosures, while also clarifying how defence-related investments fit into sustainable strategies. For Canadian asset managers, the challenge is navigating different requirements across regions, balancing EU, UK, and North American expectations, all while meeting diverse investor demands.
The real challenge for Canadian managers is staying agile, making sure ESG claims are backed by data and that disclosures are clear and consistent across markets. This means putting robust controls in place to substantiate claims, ensure holdings match labels, and manage third-party data.
While the budget does not introduce new ESG-specific regulations, it commits to investments in AI infrastructure, intellectual property commercialization, and climate competitiveness. These initiatives support innovation and sustainable growth, providing asset managers with opportunities to enhance credible, data-driven ESG strategies and further align with global standards for responsible investing.
Looking ahead, Canada is well-positioned to lead by example, building trust through robust ESG practices and transparent reporting, while remaining agile in response to evolving global regulatory expectations.
Key takeaways: Where Canada can go from here
Canadian asset managers are well-positioned to turn regulatory change into a strategic advantage. To stay ahead, leaders should:
- Rethink retail access to private assets by choosing the right product structures and building in strong governance from the outset
- Modernize cost transparency, using TCR as an opportunity to upgrade data systems and enhance client communications
- Operationalize trusted AI with clear policies, explainable applications, and consistent human oversight
- Prepare for tokenization by piloting digital fund models and adopting proven international standards
- Strengthen ESG credibility by backing up sustainability claims with solid data and aligning disclosures to the highest standards
- Embed resilience into every aspect of the business, ensuring readiness for real-world challenges.
The firms that embrace change and invest in robust systems will be the ones who set the pace for the industry
By taking these steps, Canadian asset managers can lead the way in responsible innovation, build lasting trust with investors, and position themselves for sustainable growth in 2026 and beyond.
To learn more about how regulatory changes in Canada and around the world are impacting the wealth and asset management landscape, read the full global Evolving Asset Management Regulation report.
How KPMG can help
KPMG in Canada combines deep local regulatory expertise with global innovation and transformation capabilities to help asset managers turn change into opportunity. Our team supports clients across:
- Fund product design: Guiding vehicle selection, governance, and oversight for retailization and alternative strategies.
- Cost transparency: Streamlining data systems and reporting for TCR.
- Trusted AI: Building robust AI strategies, governance, and compliance frameworks.
- Tokenization pilots: Supporting digital fund models and integration with global standards.
- ESG credibility: Strengthening data, disclosures, and governance for sustainable investing.
As Canada’s #1 advisor to private clients, KPMG brings multidisciplinary expertise in regulation, tax, technology, risk, and transformation, helping asset managers convert regulatory change into competitive advantage.
