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GDF Response to FCA QCP 25/16 No 48: Lifting the ban on retail access to certain cryptoasset exchange traded notes (cETNs)

GDF & CCI jointly responded to QCP25/16 No 48 Chapter 4 on lifting the ban on retail access to certain
cryptoasset exchange traded notes.

The key points of feedback are:

  1. We encourage the FCA to consider reviewing UK UCITS provisions more broadly extending similar access to regulated crypto ETFs in due course, as part of the broader roadmap for responsibly expanding retail access;
  2. We encourage the FCA to work with HMRC and HMT to provide clear guidance on tax treatment. Failure to provide clarity, or treating cETNs as different to other exchange-traded notes, could result in a distortion in the market, reducing the growth potential for these types of exchange-traded products compared to direct crypto purchases, despite its relative advantages in terms of security, transparency, and investor protection; and
  3. We encourage the FCA to revisit the appropriateness of the RMMI classification, as well as undertaking a broader review of the Financial Promotions regime, in light of this evolving regulatory framework. Where products are issued and promoted under full FCA authorisation, with proper disclosures, governance, and investor safeguards in place, they should be treated accordingly.

Together, our members share the goal of encouraging the responsible global regulation of crypto and digital assets to unlock economic potential, improve lives, foster financial inclusion, protect security, and disrupt illicit activity. Our feedback in the attached document is in support of these aims. 

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