The Financial Conduct Authority (FCA) is consulting on proposals that would allow certain authorised funds to hold cryptoasset exchange-traded notes (cETNs), while setting out how future annual fees and Financial Ombudsman levies could apply to authorised cryptoasset firms.
Under the consultation, UK UCITS schemes and, with certain exceptions, non-UCITS retail schemes (NURS) would be allowed to hold up to 10% of scheme property in cETNs, where this is consistent with the fund’s disclosed investment objectives and risk profile.
John Allan, director, head of innovation and operations unit, Engine, The Investment Association, told Capital Pioneer: “We welcome this sensible and pragmatic step from the FCA to allow funds to access crypto exposure through regulated ETNs as it supports innovation within a well understood framework.”
“Providing access through listed, regulated products offers a more transparent and robust route for investors than unregulated alternatives, with appropriate oversight and safeguards.”
“Any crypto exposure should sit within a well‑diversified portfolio, and fund structures – including limits such as the 10% threshold – help ensure risks are appropriately managed.”
“Crucially, this step gives firms choice – those that see a role for crypto assets can use them, while others can continue to take a more conventional approach.”
The FCA said cETNs traded on a UK Recognised Investment Exchange (RIE) can now be offered to retail consumers, subject to conduct and financial promotion rules. It said the change follows the development of the regulatory regime for cETNs and aims to clarify whether authorised funds can invest in them.
The regulator is also proposing to use annual regulated income as the tariff base for cryptoasset fee-block A.26. Cryptoasset firms with under £100,000 in regulated annual income would pay only the minimum fee, while firms above that threshold would pay a variable fee in addition.
Firms will be able to apply for authorisation from 30 September 2026, with the regime coming into force in October 2027.
Find full consultation on the FCA website here: CP26/17: Quarterly consultation paper No. 52
