FCA to Allow Retail Investors to Gain Access to Crypto ETNs Starting October

The Financial Conduct Authority will lift its ban on retail access to cryptoasset-backed exchange traded notes on 8 October this year. This follows a consultation that began in June.

Retail investors will be able to access cETNs if they are listed on FCA-recognised UK investment exchanges. These are referred to as Recognised Investment Exchanges.

Firms Must Avoid Misleading Investment Incentives

The FCA said firms must follow financial promotion rules. These rules are designed to ensure that retail clients receive clear and accurate information. Incentives to invest must not be misleading or inappropriate.

Firms must also comply with the Consumer Duty. This sets out how firms should act to deliver good outcomes for consumers. Despite this, cETNs will not be protected under the Financial Services Compensation Scheme. The FCA has warned that consumers should understand the risks before investing.

The FCA stated that the ban on cryptoasset derivatives for retail investors will stay in place. It said it will continue to review the crypto market and consider its approach to high-risk investments.