The
Financial
Conduct
Authority
(FCA)
won’t
stand
in
the
way
of
recognised
investment
exchanges
creating
listed
market
for
crypto-asset
backed
exchange
traded
notes
(ETNs),
a
new
policy
update
confirms.
“These
products
would
be
available
for
professional
investors,
such
as
investment
firms
and
credit
institutions
authorised
or
regulated
to
operate
in
financial
markets
only,”
the
FCA
said.
The
regulator
added:
“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.”
In
response,
this
morning
the
London
Stock
Exchange
Group
(LSEG)
immediately
responded,
saying
the
LSE
itself
would
start
to
accept
applications
to
list
bitcoin
and
ethereum
crypto
ETNs
from
the
second
quarter
of
this
year.
It
said
an
exact
launch
date
would
be
confirmed
“in
due
course”.
However,
the
ban
on
the
sale
of
crypto-asset
backed
exchange
traded
notes
to
retail
consumers
in
the
UK
remains
in
place.
“The
FCA
continues
to
remind
people
that
crypto-assets
are
high
risk
and
largely
unregulated,”
it
said.
“Those
who
invest
should
be
prepared
to
lose
all
their
money.
The
FCA
is
collaborating
with
government,
international
partners
and
industry
to
develop
the
UK’s
crypto-asset
regulatory
regime
and
lead
international
standards
in
this
space.”
LSEG
said
it
will
only
accept
applications
for
crypto
ETNs
that
are
physically
backed,
meaning
non-leveraged.
They
must
have
bitcoin
or
ethereum
as
their
underlying
crypto
assets,
and
they
must
have
a
market
price
or
other
value
measure
that
is
reliable
and
publicly
available.
At
the
start
of
the
year
the
FCA’s
US
counterpart,
the
Securities
&
Exchange
Commission,
approved
the
provision
and
sale
of
exchange-traded
funds
linked
to
the
price
of
bitcoin.
The
move
was
widely
interpreted
as
a
headwind
for
bitcoin,
though
existing
regulatory
constraints
mean
UK
investors
won’t
be
able
to
participate.
LSEG
shares
were
up
0.1%
to
9,272.40
pence
early
Monday.
By
Tom
Waite,
Alliance
News
editor
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