The London Stock Exchange (LSE) plans to list cryptocurrency exchange-traded notes (ETN) by May 28, following regulatory changes from the Financial Conduct Authority (FCA).
According to reports, the LSE has signaled its intention to start accepting offers for physically backed Bitcoin and Ethereum-linked ETNs, i.e. debt securities that will be traded on the exchange during London trading hours.
LSE presents the next steps
In a notice on Monday, the LSE clarified the next steps for those wishing to issue such products. According to the notice, applications for Bitcoin and Ethereum ETN will begin on April 8. It added that if the issuer wants to list its securities by May 28, it will have to wait until April 15 to submit an offer. The LSE chose May 28 to list the ETN. This is the maximum number of issuers that can be present in the market on the first day of trading.” The statement added that issuers would need sufficient time to prepare a “base prospectus” for the FCA to approve.
The statement is as follows:
“We have decided to launch the cryptocurrency ETN market on May 28, 2024 to ensure the maximum number of issuers on the market on the first day of trading. In selecting this date, we took into account the need to ensure that issuers meet the considerations detailed in the Crypto ETN Fact Sheet and, importantly, provide time for issuers seeking to accept securities on the issuance date to prepare their documentation. It means you can. Establishing a crypto ETN program that would require a base prospectus to be approved by the FCA.”
Issuers proposing to establish a cryptocurrency ETN to list their securities on the primary market on 28 May must submit to the LSE by 15 April:
- “How issuers and/or cryptocurrency ETNs meet the considerations detailed in the Cryptocurrency ETN Fact Sheet available on the exchange website (https://docs.londonstockexchange.com/sites/default/files/). Here is a letter explaining the details. document/crypto_etn_admission_fac tsheet.pdf) and
- A draft base prospectus highlighting where disclosures of the matters specified in (a) above are included in the base prospectus.”
LSE’s “Crypto ETN Admissions Fact Sheet” explains that it will only consider physically backed Bitcoin and Ether ETNs whose assets are “wholly or primarily held in cold storage.” If such a repository does not exist, the matter should be included in third-party audit reports, he said, adding that regulated custodians should be protected. The LSE details that in case of storage or audit report issues, physically backed Bitcoin and Ethereum “must be held by custodians subject to AML regulation in the UK, European Union (or equivalent European Economic Area).” law applies), Jersey, Switzerland or the United States.”
The factsheet also details how issuers can submit up to three call lines for their ETNs.
“Given the nature of the product and the approval guidelines set forth in this factsheet, the standard approval schedule does not apply to Crypto ETNs.
“Accordingly, issuers and their advisors should contact the exchanges as soon as possible to discuss the proposed approval.”
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.