Retail investors will soon be able to access crypto exchange-traded notes (cETNs), following a regulatory change announced by the Financial Conduct Authority (FCA).
Under the updated rules, cETNs must be traded on FCA-approved, UK-based Recognised Investment Exchanges (RIEs).
The move is accompanied by financial promotion requirements to ensure consumers receive clear, accurate information and are not exposed to inappropriate investment incentives.
David Geale, executive director of payments and digital finance at the FCA, said: “Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood.
“In light of this, we’re providing consumers with more choice, while ensuring there are protections in place.”
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Firms offering cETNs to retail clients must comply with the Consumer Duty, ensuring they act to deliver good outcomes.
However, investments in cETNs will not be covered by the Financial Services Compensation Scheme (FSCS), and the FCA is urging consumers to fully understand the risks before investing.
The change forms part of the FCA’s broader work to build a regulatory framework for cryptoassets.
Recent steps include proposals on stablecoins and other parts of the regime, set out in its published crypto roadmap.
The FCA’s ban on retail access to cryptoasset derivatives remains in place. The regulator will continue monitoring the market and reviewing its approach to high-risk products.
