FCA to lift ban on offering crypto ETNs to retail investors

The FCA is proposing to lift the ban on offering crypto exchange traded notes (cETNs) to retail investors, stating that similar products are already available in other countries.

It would mean cETNs could be sold to individual consumers in the UK, rather than just professional investors, if they’re traded on an FCA-approved investment exchange (a Recognised Investment Exchange or RIE).

Financial promotion rules would apply so consumers get information on the risks and would not be offered inappropriate incentives to invest, in the same way as if they bought cryptoassets directly.

This is the latest development as the FCA continues to establish a regulatory framework for crypto. The regulator has outlined its crypto roadmap and recently published proposals on stablecoins as well as other aspects of the regime.

The FCA’s ban on retail access to cryptoasset derivatives will remain in place. The regulator says it will continue to monitor market developments and consider its approach to high-risk investments.

The announcement comes alongside other proposals outlined today in a quarterly consultation paper from the FCA, to further reduce burdens on firms and support economic growth.

The FCA is simplifying reporting requirements for funds’ assessments of value, which it says will lead to a significant cost saving for 149 firms who manage more than 3,900 funds.

It is also removing more unnecessary data reporting, "which will benefit nearly all firms", the regulator says.

David Geale, executive director of payments and digital assets at the FCA, said: “This consultation demonstrates our commitment to supporting the growth and competitiveness of the UK’s crypto industry. We want to rebalance our approach to risk and lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them given they could lose all their money.”