UK FCA Considers Allowing Retail Funds to Hold Up to 10% in Crypto ETNs

The Financial Conduct Authority has proposed allowing certain approved investment funds to allocate up to 10% of their assets to crypto exchange-traded notes.

In a recent consultation paper, the UK regulator outlined that this change would apply to retail-focused UCITS funds as well as some non-UCITS funds, enabling them to gain regulated access to crypto assets under set limits.

This proposal builds on earlier steps taken by the FCA, which in August lifted its ban on retail investors trading crypto ETNs. The new plan continues that shift by addressing how funds, not just individuals, can access these products.

According to the regulator, the 10% cap is intended to act as a conservative limit while still allowing these funds to be marketed to retail investors, alongside maintaining consumer protections and stable market functioning.

Source: FCA Quarterly Consultation Paper