London Stock Exchange to Introduce Crypto ETNs on May 28

London Stock Exchange to Launch Bitcoin and Ether ETNs

London Stock Exchange (LSE) is gearing up to introduce Bitcoin (BTC) and Ether (ETH) exchange-traded notes (ETNs) starting from May 28. This move comes after the Financial Conduct Authority (FCA) granted approval on March 11 for LSE to list cryptocurrency offerings targeted at professional investors.

Key Details of the Launch

• LSE will begin accepting applications for physically-backed crypto ETNs from April 8.
• The market for crypto ETNs will be subject to approval by the UK regulator, FCA.
• Applications must be submitted by April 15, including a base prospectus for FCA approval.

Criteria for Crypto ETNs

According to LSE’s “Crypto ETN Admission Factsheet,” the exchange will consider only physically-backed BTC and Ether ETNs with assets held in cold storage. The admission guidance outlined in the Factsheet does not apply to crypto ETNs due to the unique nature of the product.

“Issuers and their advisers are encouraged to engage with the Exchange early on to discuss their proposed admission,” the exchange stated.

Industry Response

Despite FCA’s approval of listing crypto ETNs, industry experts have criticized the decision to limit access to only professional investors. Retail investors are still restricted from purchasing crypto ETPs, a move that has drawn criticism from various market participants.

Bradley Duke, chief strategist of ETC Group, expressed hope that the retail ban would be lifted in the near future. He emphasized the importance of the LSE market and confirmed preparations for listing products are underway.

FCA defended its stance, stating that it believes crypto ETNs and derivatives are not suitable for retail consumers due to the potential risks involved.