The Financial Conduct Authority (FCA) has proposed lifting its ban on offering crypto exchange traded notes (cETNs) to retail investors, in a move it says will support UK growth and competitiveness.
The announcement was made in the regulator’s latest quarterly consultation paper, published today (6 June). The FCA noted that similar products are already available to retail investors in other jurisdictions.
If the change goes ahead, cETNs could be sold to individual UK consumers – not just professional investors – provided they are traded on an FCA-recognised investment exchange.
The regulator confirmed that financial promotion rules would apply, ensuring consumers receive clear information about the risks and are not incentivised inappropriately, similar to the existing rules for direct cryptoasset investments.
Despite this proposed shift, the FCA confirmed that the ban on retail access to cryptoasset derivatives will remain in place.
David Geale, the FCA’s executive director of payments and digital assets, 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 proposal comes as the FCA continues to shape the UK’s regulatory framework for cryptoassets. It recently published a roadmap and new proposals covering areas such as stablecoins and broader elements of the emerging crypto regime.
The consultation paper also includes proposals to simplify reporting requirements for fund managers’ value assessments, following feedback to the FCA’s Consumer Duty Call for Input.
The regulator also aims to remove unnecessary data reporting requirements for firms, which it says will reduce regulatory burdens and support wider economic growth.
At the same time, the FCA reiterated it will continue to monitor developments in the market and review its approach to high-risk investments.
In a policy statement issued on 3 June, the FCA confirmed it would take a more limited approach to updating the ENFG – originally published in 2007 – which it now considers partly outdated.
The FCA had initially proposed broad changes, including granting itself the ability to name firms under investigation based on a revised “public interest” test.
However, after widespread criticism from regulated firms and trade bodies, the regulator said it would retain its current policy of naming firms only in “exceptional circumstances”.
