The London Stock Exchange (LSE) is poised to introduce Bitcoin (BTC) and Ethereum (ETH) exchange-traded notes (ETNs) commencing on May 28th. This announcement follows the Financial Conduct Authority’s (FCA) approval on March 11th, permitting the LSE to list cryptocurrency offerings exclusively for professional investors. Announced on Monday, the LSE signaled its intention to begin accepting applications for physically-backed cryptocurrency ETNs from April 8th. Furthermore, the market for these crypto ETNs will be subject to the approval of the UK regulator, the FCA, as stated in the notice.
The exchange has designated May 28th as the launch date to ensure that issuers have ample time to meet the requirements for consideration. In the LSE’s own words,
„We have decided to launch the market in Crypto ETNs on 28 May 2024 to enable the maximum number of issuers to be present in the market on the first day of trading.“
The London Stock Exchange noted that applications will not be accepted beyond April 15th, including the submission of a base prospectus for FCA approval.Additionally, according to the LSE’s „Crypto ETN Admission Factsheet,“ the exchange will only consider physically-backed BTC and Ether ETNs with their assets held in cold storage. Moreover, the admission guidance outlined in this Factsheet does not apply to cryptocurrency ETNs, „given the nature of the product.“ The LSE advises, „Issuers and their advisers should therefore liaise with the Exchange at the earliest opportunity to discuss their proposed admission.“
However, industry players have criticized the FCA for limiting ETNs to „professional investors“ only. Despite the FCA’s approval to list cryptocurrency ETNs, the regulator continues to prohibit retail investors from purchasing cryptocurrency exchange-traded products (ETPs). The FCA’s stance contrasts with several other jurisdictions that have opened the door for such vehicles to individual investors. Bradley Duke, chief strategist of ETC Group, expressed hope that the retail ban will be lifted soon after, stating, „The LSE is such an important market for us we definitely will list products when possible and preparation is under way,“ he told the Financial Times.
The FCA emphasized earlier this month that it „continued to believe that crypto ETNs and crypto derivatives are ill-suited for retail consumers due to the harm they pose.“
