London Stock Exchange to Launch Bitcoin and Ether ETNs in May, Subject to UK FCA Approval
Summary:
The London Stock Exchange (LSE) plans to introduce cryptocurrency exchange-traded notes (ETNs) for Bitcoin and Ether on May 28, with applications opening on April 8. The move is contingent on approval from the UK's Financial Conduct Authority and will initially only be available to professional investors due to a recent FCA ban. To receive approval, ETNs need to fulfill a number of conditions including being physically backed and un-leveraged, and they can only be in Bitcoin or Ether. The FCA also aims to tighten measures against potential crypto market abuse.
Cryptocurrency exchange-traded notes, specifically tracking Bitcoin and Ether, will be inaugurated by The London Stock Exchange (LSE) on May 28. The announcement on March 25 indicated that applications for these notes could begin as early as April 8, with successful funds being listed the next month, providing they receive approval from the Financial Conduct Authority (FCA) of the UK. Notably, a detailed plan of investment opportunity and a written mention of fulfilling ETN criteria need to be submitted by issuers by April 15. However, in compliance with the ban implemented by U.K. FCA in January 2021, crypto ETNs will be accessible solely to professional investors despite attracting considerable investor attention. To qualify for approval, these crypto ETNs must be physically supported, without leverage, record a stable market value, and exclusively be expressed in Bitcoin or Ether. These underpinning assets need to be stored off-line with a custodian licensed for Anti-Money Laundering within the UK, EU, or US. Issuers get the opportunity to present up to three different currency tracks under the ETNs. Mentioning the unique nature of the product, LSE staff advisory recommends prospective issuers to communicate their proposed listing at their earliest convenience. This move comes after the US Securities and Exchange Commission gave the green light to spot Bitcoin exchange-traded funds in January, sans the retail investor feature. The FCA, in its two-year blueprint, aims to amplify actions against potential crypto market misuse. Enhancements to surveillance and intervention mechanisms to maintain market transparency and avoid abuse are anticipated by the regulator. Recently, in October, the FCA set forth new regulations for crypto marketing, vowing stringent action against any possible violations. It's worth noting that London has recently emerged as the world’s most business-friendly city for crypto.
Published At
3/25/2024 9:07:15 PM
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