The UK Financial Conduct Authority (FCA) has announced an important shift regarding retail access to cryptocurrency exchange-traded notes (cETNs). Under the new guidelines, firms will be permitted to provide retail consumers with access to these products, significantly expanding the investment options available to this sector.
To qualify as accessible to retail clients, the cETNs must be traded on investment exchanges that have received approval from the FCA, specifically those recognized as Recognised Investment Exchanges (RIEs). In addition to this, firms are required to adhere to strict financial promotion regulations designed to ensure that consumers receive accurate information and are not enticed by misleading investment incentives.
Furthermore, a Consumer Duty will be enforced for firms providing these products, emphasizing the need to prioritize the welfare of consumers. However, it’s essential to note that these offerings will not fall under the protection of the Financial Services Compensation Scheme (FSCS). As with any investment, individuals are urged to fully comprehend the associated risks prior to making commitment decisions.
This announcement marks a significant milestone in the FCA’s ongoing efforts to create a robust regulatory framework for cryptocurrency investments. Despite this new provision for cETNs, the FCA’s prohibition on retail access to crypto-asset derivatives remains intact. The authority continues to scrutinize market trends and evaluate its policies concerning high-risk investments, ensuring that consumer protection remains at the forefront of its agenda.
The revised regulations are set to take effect on October 8, 2025. This development follows an earlier decision by the FCA in January 2021, when it imposed a ban on the sale, marketing, and distribution of derivatives and ETNs linked to unregulated transferable crypto-assets for retail clients.
Prior to the new access rules, the FCA began engaging in consultations in June 2025 aimed at lifting the previously placed bans on retail access to cETNs, which reflects the regulatory body’s responsiveness to market evolution and consumer demand.
In conclusion, the regulatory changes represent a crucial advancement for both consumers looking to enter the cryptocurrency market and firms aspiring to facilitate these investments while maintaining rigorous standards of consumer protection and information transparency.