(Alliance News) - The UK Financial Conduct Authority on Monday said it won't stand in the way should recognised investment exchanges choose to create a listed market segment for crypto-asset backed exchange traded notes.
London Stock Exchange Group PLC immediately responded on Monday by saying the London Stock Exchange will start to accept applications to list bitcoin and ethereum crypto ETNs from the second quarter. It said an exact launch date will be confirmed "in due course".
LSEG shares were up 0.1% to 9,272.40 pence early Monday.
"These products would be available for professional investors, such as investment firms and credit institutions authorised or regulated to operate in financial markets only," the FCA said.
The financial regulator added: "With increased insight and data due to a longer period of trading history, the FCA believes exchanges and professional investors should now be able to better establish whether cETNs meet their risk appetite."
However, the ban on the sale of crypto-asset backed exchange traded notes to retail consumers in the UK remains in place.
"The FCA continues to remind people that crypto-assets are high risk and largely unregulated. Those who invest should be prepared to lose all their money. The FCA is collaborating with government, international partners and industry to develop the UK's crypto-asset regulatory regime and lead international standards in this space," it said.
LSEG said it will only accept applications for crypto ETNs that are physically backed, meaning non-leveraged. They must have bitcoin or ethereum as their underlying crypto assets, and they must have a market price or other value measure that is reliable and publicly available.
By Tom Waite, Alliance News editor
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London Stock Exchange (LSEG)