Exchange-traded notes (ETNs) backed by Bitcoin and Ether (ETH) will be available for applications on the London Stock Exchange (LSE) by by Q2 2024.
The notification, made on March 11, confirms compliance with the exchange’s cryptocurrency ETF fact sheet. The exact start date for application acceptance is unknown, but the conditions include physically backed and non-leveraged cryptocurrency ETNs with publicly available market prices or value measurements for BTC or ETH.
Under LSE’s standards, underlying cryptocurrency assets must be maintained by custodians who comply with anti-money laundering (AML) rules in the US, UK, EU, Switzerland, or other jurisdictions, and must be predominantly stored in secure means such as cold storage.
During trading hours, investors can trade cryptocurrencycurrency asset performance-reflecting instruments using ETNs, which are debt securities that provide exposure to underlying assets as defined by the LSE.
ETNs offer a more versatile option than ETFs since they are backed by issuers as opposed to asset pools. ETFs frequently highlight intricate debt strategies that are difficult for fund structures to handle.
Effectively protecting investors and putting in place strong controls are critical, according to the financial regulator. The UK Listing Regime requires cryptocurrencycurrency-backed ETNs to provide prospectuses and disclose on a regular basis, as the FCA also made clear.