UK FCA Proposes 10% Crypto ETN Allocation Cap for Authorized Funds
The UK Financial Conduct Authority has proposed permitting authorized funds to allocate up to 10% of their holdings to crypto exchange-traded notes. The move builds on the regulator's decision last year to lift the retail ban on crypto ETNs, extending institutional access further into the regulated fund space.
The UK Financial Conduct Authority has put forward a proposal that would allow authorized funds to hold up to 10% of their assets in crypto exchange-traded notes. This represents a meaningful step in the gradual opening of regulated investment vehicles to digital asset exposure in the United Kingdom.
The proposal follows the FCA's earlier decision to lift a ban that had previously prevented retail investors from accessing crypto ETNs. By now addressing authorized funds directly, the regulator is extending the policy into a broader segment of the investment management industry.
While the proposal covers crypto ETNs broadly, XRP-related exchange-traded products could fall within scope depending on how any final rules are structured. The 10% cap appears designed to limit concentration risk while still permitting meaningful exposure.
The FCA's move is consistent with a wider trend among major financial regulators reviewing and updating their frameworks for crypto asset products. No final rule has been confirmed, and the proposal remains subject to consultation and further review.
Key facts
- •FCA proposes allowing authorized UK funds to hold up to 10% in crypto ETNs
- •Proposal extends access following last year's lift of the retail crypto ETN ban
- •Applies to authorized funds, broadening the scope beyond retail investors
- •No final rule confirmed; proposal is subject to consultation