Firms will soon be able to give retail consumers access to crypto
exchange traded notes (cETNs), under changes announced by the
Financial Conduct Authority (FCA).
cETNs that retail consumers can access must be traded on an
FCA-approved, UK-based investment exchange (a Recognised
Investment Exchange or RIE). Financial promotion rules will apply
so consumers get the right information and aren't offered
inappropriate incentives to invest.
David Geale, executive director of payments and digital
finance at the FCA, said: “Since we restricted retail
access to cETNs, the market has evolved, and products have become
more mainstream and better understood. In light of this, we're
providing consumers with more choice, while ensuring there are
protections in place. This should mean people get the information
they need to assess whether the level of risk is right for them.”
The Consumer Duty will apply to firms offering these products to
retail investors. However, there won't be coverage from the
Financial Services Compensation Scheme (FSCS). Consumers should
ensure they understand the risks before deciding to invest.
This is the latest development as the FCA continues to establish
a regulatory framework for crypto. The regulator has outlined its
crypto roadmap and recently published proposals on stablecoins as
well as other aspects of the regime.
The FCA's ban on retail access to cryptoasset derivatives will
remain in place. The regulator will continue to monitor market
developments and consider its approach to high-risk investments.
Notes to editors
- In January 2021, the FCA banned the sale, marketing
and distribution of derivatives and ETNs that reference
unregulated transferable cryptoassets to retail clients.
- In March 2024, the FCA announced it would not object to
requests from recognised investment exchanges (such as the London
Stock Exchange) to create a UK listed market segment for
cryptoasset-backed exchange traded notes (cETNs) for professional
investors.
- In June 2025, the FCA launched a consultation on
proposals to lift the ban on retail access to cETNs.
- The FCA grants recognition orders to investment exchanges in
the UK to make sure they meet regulatory standards. This power is
provided under the Financial Services and Markets Act 2000 for
the FCA to consider applications from UK entities (a body
corporate or an unincorporated association) for recognition as a
UK recognised body. Examples of recognition requirements include
equivalent protection for investors.
- The change will come into force on 8 October 2025.
- Read Handbook Notice 132.
