The Financial Conduct Authority (FCA) has announced the opening of retail investor access to crypto exchange-traded notes (cETNs). This change comes amid the growth of the crypto market and a better understanding of products by consumers.
Changes in FCA Policies
According to FCA's statements, this move is a response to market evolution and trends towards greater consumer understanding of products. '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,' said David Geale, FCA's executive director.
Crypto ETN Market
The regulator stated that retail consumers can only access cETNs through UK-based Recognised Investment Exchanges (RIE). Firms offering these products must comply with the regulator's rules, including mandatory information on how the products work and prohibition of inappropriate marketing offers. However, investors must keep in mind that in case of losses, they are not protected by the Financial Services Compensation Scheme (FSCS).
Risks and Recommendations for Investors
Despite the FCA's new approval, crypto ETNs are still considered high-risk instruments. The regulator emphasizes that consumers should ensure they understand the risks before deciding to invest. FCA continues to monitor market developments and maintains the ban on retail access to crypto derivatives.
With the new change, FCA opens doors for retail investors, but it is important to remember the associated risks and ensure informed decision-making before investing in high-risk products.
