Posted by Martin Bartlam and Mariel Luna on 16 October 2020
Tagged to Cryptoassets, Derivatives, Digital Assets, FCA

The Financial Conduct Authority (FCA) announced on 6 October 2020 the publication of final rules banning the sale of derivatives and exchange traded notes (ETNs) to retail consumers that reference certain types of cryptoassets.

In its statement the FCA stated that it ‘considers these products to be ill-suited for retail consumers due to the harm they pose’. It pointed to certain features of cryptoassets falling outside the regulatory perimeter which mean retail customers may suffer harm from unexpected losses in investing in such products; including unreliability of valuation, prevalence of market abuse, extreme volatility in cryptoasset price movements and overall deemed them inadequate for retail customers.  

To address these harms, the FCA will be introducing new rules banning the sale, marketing and distribution to all retail consumers of any derivatives and ETNs that reference unregulated transferable cryptoassets.

The ban is due to come into effect on 6 January 2021.

You can read the FCA’s Policy Statement here.

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