Key dealers
- FCA plans to allow retail investors to buy Crypto Exchange Traded Notes.
- Crypto -Terivat remains prohibited for retailers according to the FCA proposal.
Financial Conduct Authority (FCA), the British body that monitors the country’s financial services, is suggests to lift a ban This is currently preventing retail investors from buying crypto exchange notes (ETN). However, the regulator wants to maintain its ban on cryptoderivate for retailers.
Crypto ethns are debt instruments aimed at reflecting performance for a crypto asset or a crypto index, and offers investors another way to gain exposure to the crypto market. In essence, investors borrow money to the ETF issuer, who promises to pay returns based on Crypto’s price movements.
FCA announced the ban When selling cryptoderivate and crypto eth to retail consumers in October 2020. As part of the rule that came into force in January 2021, companies are prohibited from selling, marketing or distributing these products to individual investors in the UK.
At that time, FCA stated that crypto-derivatives and ETNs were “poorly suitable for retail consumers” due to the high risks of injury, including extreme volatility, lack of reliable valuation methods, susceptibility to market abuse and cyber crime and poor consumer understanding of crypto assets.
The regulator also noted that there was no legitimate investment need for retail investors to access these products and that the ban was necessary to provide an appropriate level of protection.
On one press release FCA was published on June 6 and said it plans to extend access to the Krypto -etns in addition to professional investors, provided that the products are traded on recognized investment exchanges.
Rules for economic marketing would require clear risk information for consumers, similar to direct crypto access investments, the supervisory authority noted.
“This consultation shows our commitment to supporting growth and competitiveness in the UK’s crypto industry,” said David Geale, CEO of payments and digital funding at FCA.
“We want to balance our strategy to risk and lift the ban would allow people to make the choice as to whether such high -risk investment is right for them, given that they could lose all their money,” he added.
The move is part of FCA’s ongoing efforts to establish a crypto regulation, after its recently published proposals for Stablecoins and other regulatory aspects.
The regulator also announced further proposals to reduce industry burden, including simplified reporting requirements for the funds’ value assessments.
