The UK’s Financial Conduct Authority (FCA) has proposed lifting the ban on offering crypto exchange traded notes (cETNs) to retail investors.
At present, these high-risk products are only available to professional investors, but the change would allow individual consumers in the UK to access them, provided they are traded on an FCA-approved recognised investment exchange (RIE).
Similar investment products are already available to retail investors in other countries.
Should the proposal go ahead, financial promotion rules would apply to ensure consumers are clearly informed about the risks and are not offered inappropriate incentives, similar to the safeguards in place for direct purchases of cryptoassets.
David Geale, Executive Director of Payments and Digital Finance 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.”
The move is part of the FCA’s wider effort to establish a regulatory framework for cryptoassets.
The regulator has already set out a crypto roadmap and published recent proposals on stablecoins and other aspects of the emerging regime.
However, the FCA’s ban on retail access to cryptoasset derivatives will remain in place. It also stated that it would continue monitoring market developments and reviewing its approach to high-risk investments.
The proposal was included in the FCA’s latest quarterly consultation paper, which also outlines other measures aimed at easing regulatory burdens and supporting economic growth.
These include plans to simplify reporting requirements for funds’ assessments of value, following feedback from the Consumer Duty Call for Input, a change expected to lead to significant cost savings for 149 firms managing over 3,900 funds.
The regulator also plans to remove unnecessary data reporting, a move that would benefit nearly all regulated firms.
Featured image credit: Edited by Fintech News Switzerland, based on image by wirestock_creators via Freepik
