Back
UK FCA proposes allowing authorized funds to allocate up to 10% to crypto ETNs

UK FCA proposes allowing authorized funds to allocate up to 10% to crypto ETNs

The FCA’s consultation would let certain authorized funds, including UCITS and some non-UCITS vehicles, hold crypto ETNs within a 10% cap while seeking views on looser limits for more speculative schemes.

Fact Check
The FCA's own CP26/17 page explicitly states the proposal to allow certain authorised funds to hold cETNs up to 10% of scheme property. The Block's article elaborates that eligible funds include UCITS and most non-UCITS retail schemes and that direct crypto holdings remain prohibited, matching the claim verbatim.
    Reference: 12
Summary

The UK Financial Conduct Authority said in a quarterly consultation paper that certain authorized funds, including UCITS and some non-UCITS funds, could hold up to 10% of assets in crypto exchange-traded notes. The regulator said the cap reflects the speculative nature of crypto assets and is seeking feedback through July 13 on whether unregulated and qualified investor schemes should face no holding limit for more speculative assets. Under the broader proposal, eligible authorized funds would be able to buy listed crypto ETNs while direct crypto ownership would remain banned. The FCA has said it could revisit that stance after broader crypto and client-asset protection rules are in place.

Terms & Concepts
  • crypto ETNs: Exchange-traded notes that give investors exposure to the price of crypto assets.
  • UCITS: A category of regulated investment funds that can be marketed broadly across Europe under common rules.
  • authorized funds: Investment funds permitted to operate under the UK's regulated fund framework.