The Financial Conduct Authority (FCA), the United Kingdom’s financial regulator, has proposed allowing certain retail investment funds to allocate up to 10% of their assets to cryptocurrency exchange-traded notes (ETNs). This recommendation is outlined in the FCA’s latest quarterly consultation paper, which focuses on UCITS (Undertakings for Collective Investment in Transferable Securities) and some non-UCITS retail schemes (NURS).
UCITS and NURS are comparable to U.S. mutual funds, providing regulated, open-ended structures that pool capital from retail investors into managed portfolios. The FCA noted that the proposed limit aims to reduce the potential risks associated with exposure to crypto ETNs.
The FCA’s initiative represents a significant step toward broader acceptance of crypto exchange-traded products (ETPs) in the UK. In October 2025, the regulator had already lifted a ban on retail investors accessing such funds, which had been in place since 2021. This shift reflects a growing recognition of the role that investment vehicles allowing indirect exposure to cryptocurrencies can play in the market.
Critics have previously highlighted regulatory barriers to the adoption of these financial instruments, arguing that they could hinder the UK’s competitive position in the global financial landscape. The FCA’s latest proposal may address some of these concerns, potentially paving the way for a more integrated approach to cryptocurrency investment in the UK.
The FCA's proposal to permit a 10% allocation of assets in crypto ETNs for certain investment funds marks a notable shift in the UK's regulatory stance on cryptocurrency. This move aims to enhance market competitiveness while managing associated risks.
Source: The Financial Conduct Authority