July 22, 2024

London Stock Exchange (LSE) is set to launch Bitcoin and Ether Exchange traded notes (ETNs) for Pro investors from May 28.

The announcement follows the country’s Financial Conduct Authority (FCA) approval on March 11 to allow LSE to list crypto offerings for Pro investors.

According to Crypto News, LSE said it would start accepting applications for physically backed crypto ETNs from April 8. However, the market for Crypto ETNs would be heavily regulated by the FCA.

The exchange choose May 28 to give issuers enough time to meet the requirements.

“We have decided to launch the market in Crypto ETNs on 28 May 2024 to enable the maximum number of issuers to be present in the market on the first day of trading,” LSE stated.

Additionally, the exchange will only accept physically-backed BTC and Ether ETNs with its assets held in cold storage by an Anti-Money Laundering licensed custodian in the United Kingdom, European Union, or United States.

Despite the good news of LSE now listing crypto offerings to Pro investors, industry players are not happy with its availability to only “professional investors.” The FCA continues its ban on retail investors buying crypto ETNs

The FCA stressed early this month that it “continued to believe that crypto ETNs and crypto derivatives are ill-suited for retail consumers due to the harm they pose.”

Finally, Issuers interested in the LSE-listed ETNs must submit a draft prospectus and a letter explaining why they meet ETN requirements by April 15.

ETN stands for exchange-traded note. ETNs are a type of exchange-traded product but with a somewhat different legal structure. Instead of equity in the fund, each traded note of an ETN represents an obligation from a legal entity holding the underlying asset as collateral. They are effectively debt securities.

Exchange Traded Notes or ETNs are also traded on a stock exchange similar to Bitcoin Exchange Traded Funds (ETFs). However, ETNs are unsecured debt securities that are backed by the issuer’s credit.


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