According to the latest announcement from the London Stock Exchange (LSE), the exchange has confirmed that it will start accepting applications for listing Bitcoin and Ethereum ETNs in the second quarter of 2024. ETNs, similar to ETFs, are typically issued by banks or investment managers to track the price fluctuations of underlying indices or assets. The main difference between the two is that ETNs can operate without holding the corresponding underlying assets.
According to the announcement, the exchange will only consider applications for crypto ETNs that meet the following criteria:
1. Have physical backing.
2. Have reliable and publicly available market prices.
3. Have Bitcoin or Ethereum as the underlying crypto assets.
4. Stored in cold wallets and provide third-party audit reports.
5. Custodians regulated by AML regulations in the UK, EU, Switzerland, or the US.
6. Only applicable to professional investors and can only be traded during specified time periods.
At the same time, the Financial Conduct Authority (FCA) of the UK stated in a press release that it will not oppose requests from “Recognized Investment Exchanges (RIEs)” to establish segmented markets for cryptocurrency ETN products. The FCA stated that the exchanges will be responsible for ensuring sufficient control measures are taken for orderly trading and providing appropriate protection for investors.
However, the regulatory authority also emphasized that these products will only be available to professional qualified investors, including investment firms and credit institutions, and general retail investors will be prohibited from trading such commodities.
