- UK’s FCA has shifted its position on crypto exchange-traded notes (ETNs).
- The regulator said in a statement the products might be considered.
- The approval of such products is subject to certain conditions.
The United Kingdom’s Financial Conduct Authority (FCA) said on Monday it “will not object” to requests from regulated exchanges to set up a market segment for crypto asset-backed Exchange Traded Notes (cETNs).
Exchange-traded notes (ETNs) are types of unsecured debt securities issued by an investment bank or asset management company. They are often used to track assets or indices that other ETPs cannot. Unlike traditional bonds with interest payments, the prices of ETNs fluctuate like stocks.
FCA to Allow Crypto ETNs Access By Professional Investors
According to a statement dated March 11, the FCA is likely to allow Recognised Investment Exchanges (RIEs) to launch crypto ETNs provided the exchanges “continue to make sure sufficient controls are in place” and the products “meet all the requirements of the UK Listing Regime.”
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“With increased insight and data due to a longer period of trading history, the FCA believes exchanges and professional investors should now be able to better establish whether cETNs meet their risk appetite,” the regulator wrote.
The FCA stated that crypto ETNs would be available only to professional investors, such as credit firms and investment institutions permitted to operate in financial markets. Retail customers are banned from accessing the products and any other crypto derivatives “due to the harm they pose.”
RIEs that want to create a new UK-listed market segment for crypto ETNs must submit their applications to the FCA, after which the regulator will consider them “on a case-by-case basis.”
Read about the UK’s plan to regulate stablecoins and crypto staking:
UK Eyes Stablecoin and Crypto Staking Regulations
Stay updated on Crypto.com’s recent win in the UK:
Crypto.com Wins Electronic Money Institution License in the UK
