The London Stock Exchange (LSE) will list crypto exchange-traded products (ETPs) for the first time later this month, following the approval of prospectuses from WisdomTree (WT) and 21Shares by the Financial Conduct Authority (FCA).
New York-based WisdomTree received approval to list its Physical Bitcoin (BTCW) and Physical Ethereum (ETHW) ETPs, with trading expected to begin on May 28. Zurich-based 21Shares was approved for bitcoin (BTC) and ether (ETH) products and may also start trading around the same time. A prospectus from Invesco was approved, though the firm has made no further comment on its plans.
The FCA’s approval comes several months after the U.S. green light for spot bitcoin exchange-traded funds in January. Similar products have been trading in various European jurisdictions for several years. Both WisdomTree and 21Shares were among the firms to have spot ETFs approved in the U.S. earlier this year.
In March, the Financial Conduct Authority (FCA) stated that it will not object to requests from Recognised Investment Exchanges (RIEs) to establish a UK-listed market segment for crypto asset-backed Exchange Traded Notes (cETNs).
Shortly after, the LSE confirmed it would accept applications for bitcoin (BTC) and ether (ETH) products in the second quarter. Unlike products in Europe and the U.S., the FCA is allowing the London ETPs to be available only to professional investors.
The FCA introduced a ban on crypto derivatives products, including ETPs, in January 2020. However, with such products being widely available in Europe for several years and following the approval of U.S. spot ETFs, the regulator adjusted its stance, allowing these products for professional investors while maintaining the ban for retail investors.
WisdomTree’s products will carry fees of 35 basis points, while 21Shares has not yet disclosed its fees.
The conditions for admission to the LSE for Crypto ETNs include several key criteria outlined in a factsheet published by the exchange. Firstly, the proposed Crypto ETN must be physically backed and have a reliable and publicly available market price or value measure of the underlying Bitcoin or Ethereum assets.
