FCA Proposes 10% Limit on Crypto ETNs in Authorized UK Funds
The measure creates a narrow, regulated route for retail funds to gain crypto exposure while keeping direct cryptocurrency ownership off limits and preserving investor protections.
Overview
- The Financial Conduct Authority published the proposal on Monday and opened a five-week consultation that closes on July 13, 2026.
- Under the draft rules UCITS and most non-UCITS retail schemes would be limited to a 10% allocation to crypto exchange-traded notes, while qualified investor schemes would face no cap.
- The proposal bars authorized funds from holding crypto directly and limits permitted ETNs to those listed on UK-recognised exchanges or eligible EU and global markets.
- Fund managers would have to ensure ETN holdings match a fund’s stated objectives and risk profile and disclose any exposure above a genuine de minimis level.
- The move follows the FCA’s August 2025 lift of the retail ETN ban, October 2025 listings of physically backed bitcoin and ether ETNs, and HMRC’s April 2026 ruling on Innovative Finance ISAs, and regulators will review consultation feedback before final rules or any change to the ban on direct holdings.