In a notable development, the London Stock Exchange (LSE) has revealed plans to introduce Exchange-Traded Notes (ETNs) tracking Bitcoin and Ethereum on May 28, 2024. The announcement follows the LSE’s recent decision to accept applications for the admission of these Crypto ETNs starting April 8.
Subject to approval from the UK’s Financial Conduct Authority (FCA), the LSE aims to commence trading on May 28. This allows issuers ample time to meet regulatory requirements. However, accessibility will be limited to professional investors. This is following the UK FCA’s restrictions on retail sales of crypto derivatives and ETNs since January 2021.
To adhere to FCA criteria, these crypto ETNs must be physically backed, non-leveraged, and denominated exclusively in Bitcoin or Ethereum. Moreover, they must maintain a dependable value based on market prices and be securely stored in cold storage by licensed custodians in select jurisdictions.
Issuers can propose up to three currency lines for the ETNs. This necessitates early discussions with the LSE due to unique admission timelines. This initiative reflects regulatory prudence amidst burgeoning interest in digital assets. It follows the US Securities and Exchange Commission’s approval of spot Bitcoin exchange-traded funds in January. However, retail investor access remains unavailable.
Looking ahead, the FCA aims to bolster measures against crypto market abuse. They also aim to enhance monitoring systems for market integrity over the next two years. These efforts align with previous regulatory actions. This move underscores the cautious approach of the London Stock Exchange amid the evolving landscape of digital assets.
