LSE to Unveil Crypto ETNs on May 28

The London Stock Exchange (LSE) has announced plans to launch cryptocurrency exchange-traded notes (ETNs) for Bitcoin and Ether on May 28. Applications for these crypto ETNs can be submitted starting from April 8, with successful funds being listed in the following month if approved by the Financial Conduct Authority (FCA). These ETNs will only be available to professional investors due to the FCA’s ban on the sale of crypto derivatives and ETNs, which went into effect in January 2021.

In order to be approved, the crypto ETNs must meet certain criteria. They must be physically backed, non-leveraged, and have a reliable value based on the underlying market price of Bitcoin or Ether. The underlying assets also need to be held in cold storage by a licensed custodian with Anti-Money Laundering credentials in the U.K, the EU, or the U.S. Issuers can submit up to three different currency lines for the ETNs.

The LSE staff has stated that the admission timelines for Crypto ETNs will not follow the standard process due to the nature of the product. Issuers and their advisers are encouraged to communicate with the Exchange at the earliest opportunity to discuss their proposed admission.

This move by the LSE follows the footsteps of the U.S. Securities and Exchange Commission’s approval of spot Bitcoin exchange-traded funds earlier this year. Unlike the U.S. approval, the LSE’s crypto ETNs will not be available to retail investors.

The FCA has included tightening measures against crypto market abuse as one of its goals in its two-year plan. The regulator intends to improve monitoring and intervention systems to prevent market abuse and maintain market integrity. Last year, the FCA also implemented new rules for crypto-related marketing, promising to take robust action against any potential breaches.

Tyrus Oxley

Tyrus Oxley

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