UK FCA Proposes 10% Crypto Allocation for Retail Investment Funds
- The UK’s Financial Conduct Authority (FCA) proposed a cap of up to 10% for authorized investment funds to hold in crypto exchange-traded notes.
- This proposal aims to close the regulatory gap between retail investors and funds, aligning with international standards.
- Retail-focused funds, such as UCITS and some non-UCITS, must ensure that crypto investments align with their risk profiles and objectives.
- The consultation period for this proposal will last five weeks, ending on July 13.
- Unregulated investor schemes can invest without a limit but cannot market to retail investors.
The FCA’s initiative reflects an effort to modernize investment options while ensuring consumer protection in the evolving landscape of cryptocurrency regulations.
If implemented, this would allow retail funds limited exposure to crypto products, addressing both investor demand and regulatory concerns about the speculative nature of cryptocurrencies.
