London Stock Exchange to Launch Bitcoin, Ethereum ETNs on May 28

The London Stock Exchange announced the launch of Bitcoin and Ethereum ETNs on May 28. Key dates leading to the launch include April 8 for issuer applications, May 22 for FCA approval, and April 15 for ETN requirements submission. Why May 28 for the debut?

When Will Crypto ETNs Debut on the London Stock Exchange?

In a March 25 announcement, the London Stock Exchange (LSE) revealed its plans to launch Bitcoin (BTC) and Ethereum (ETH) crypto exchange-traded notes (ETNs) on May 28.

Key Dates for ETN Launch

The LSE has outlined several key dates leading up to the launch:

• April 8: Applications for admission will be accepted from issuers.
• May 22: The Financial Conduct Authority (FCA) must approve base prospectuses for ETNs intended to launch on day one of trading.
• April 15: Issuers targeting the May 28 launch date must submit a letter outlining how their ETN meets all requirements, along with a base prospectus draft.

Why May 28?

The LSE chose May 28 to allow the maximum number of issuers to participate on the first trading day. This date provides ample time for applicants to prepare necessary documentation and for the LSE to assess their compliance with requirements.

FCA's Role in ETN Approval

The launch date hinges on the FCA approving base prospectuses from applicants. The FCA must list crypto ETNs on its Main Market and Official List.

Previous Expectations

On March 11, the LSE had indicated that it would accept applications in the second quarter of 2024, but without specifying a precise date.

ETN Requirements

The LSE has outlined several requirements for ETNs:

• No retail trading allowed.
• Funds must be non-leveraged and physically backed by Bitcoin or Ethereum.
• At least 90% of assets must be held in cold storage or an equivalent method, with a qualified custodian.

FCA's Position on Crypto ETNs

Separately, the FCA stated on March 20 that it would not object to requests from Recognised Investment Exchanges to create crypto ETNs.

Significance of UK's ETN Allowance

The UK's willingness to permit crypto ETNs is significant, as it provides professional investors with new avenues for crypto exposure.

Distinction Between ETNs and ETFs

While crypto ETNs share similarities with exchange-traded funds (ETFs) in terms of tracking the underlying crypto's price, they differ in their structure and design.