Investor FAQ: FCA Ban on the Sale of Crypto ETNs to UK Retail Investors
What has the FCA announced?
The UK’s Financial Conduct Authority (FCA) has recently published rules banning the sale of exchange traded notes (ETNs) referecing crypto assets to UK retail investors from 6 January 2021.
Which XBT Provider products are affected?
Does the FCA announcement mean that I have to sell my holdings?
No. Investors should in the first instance speak to their brokers or advisors to discuss their specific situations. However, the FCA have confirmed that they will not require retail investors to sell existing holdings.
Does CoinShares intend to close the Exchange Traded Notes (ETNs)?
No. CoinShares will continue to operate XBT Provider as normal and has no plans to close the ETNs prematurely.
Will I be able to buy before the deadline?
Investors should in the first instance speak to their brokers or advisors to discuss their specific situations. We note that the final rules banning the sale of these types of products will come into effect on 6 January 2021.
Will we be able to sell after the ban comes into effect?
Yes. UK retail investors wishing to close their position after the final rules come into effect (i.e. 6 January 2021) will be able to do so.
Will the FCA announcement affect retail consumers outside the United Kingdom?
No. It is clearly stated that the FCA is prohibiting the marketing, distribution, and sale in or from the UK to all retail clients of any derivatives and ETNs that reference certain types of cryptoassets.
How the FCA announcement will affect CoinShares?
We want to reassure our investors that we will continue to operate our products as normal. We have a broad and diversified client base across a number of jurisdictions and our business strategy is to maintain that diversification and not become reliant on any single country. You can read our full response here.
What effect will the FCA ban have on the liquidity of your products?
Our ETNs are traded on multiple exchanges outside the U.K. and we expect that to continue. Moreover, because our client base is distributed across several jurisdictions, we do not expect that the liquidity of our ETNs will be materially affected by the FCA ban.