UK FCA Seeks Feedback on 10% Limit for Authorized Funds' Exposure to Crypto ETNs

The UK Financial Conduct Authority (FCA) has set out proposals to let authorized investment funds—including UCITS funds and most non‑UCITS retail funds—invest up to 10% of their assets in crypto exchange-traded notes (ETNs), according to ME News. The plan was published in the regulator's 52nd quarterly consultation paper on June 8 (UTC+8). The FCA said the 10% ceiling is designed to stop funds from being reclassified as "restricted mass-market investment products," allowing them to retain their standing as mainstream offerings for retail investors. The cap would not apply to qualified investor funds, which are available only to professional and sophisticated investors. Long-term asset funds and non‑UCITS retail funds that operate as alternative investment funds would be outside the scope of the proposal. The consultation runs for five weeks and closes on July 13. In a related move, the FCA in August 2025 ended a four-year prohibition on retail investors buying crypto ETNs. That change paved the way for issuers including 21Shares, Bitwise, WisdomTree and BlackRock to list physically backed Bitcoin and Ethereum products on the London Stock Exchange. (Source: Foresight News)