The London Stock Exchange (the “Exchange”) has officially announced its decision to accept applications for the admission of Bitcoin and [ccpw id=60480] crypto Exchange Traded Notes (ETNs) in the second quarter of 2024. This move comes in alignment with the details outlined in the crypto ETN factsheet, accessible on the Exchange’s website.
To ensure the integrity of its markets, the Exchange will only consider applications for admission of Crypto ETNs that meet specific criteria. These include physical backing, a reliable and publicly available market price for the underlying cryptoassets ([ccpw id=60415] or Ethereum), and compliance with cold storage requirements for holding the cryptoassets. Issuers must also engage with a custodian subject to Anti-Money Laundering (AML) regulation in specific jurisdictions.
Trading Segment
In response to the Financial Conduct Authority’s (FCA) ban on the sale of derivatives and ETNs referencing unregulated cryptoassets to retail consumers, Crypto ETNs admitted to trading on the LSE will be exclusively available for professional investors. The designated trading segments are “ETPR – ETN – EUI – PROFESSIONAL INVESTORS ONLY – SETS” and “ECPR – ETN – ICSD – PROFESSIONAL INVESTORS ONLY.”
Prospective issuers are encouraged to engage early with the Exchange to discuss their proposed admission, considering the unique nature of Crypto ETNs. Standard admission timelines do not apply, and issuers should liaise with the Exchange promptly. Additionally, separate discussions with the FCA regarding listing applications are recommended.
Issuers have the option to admit up to three different currency lines for each Crypto ETN. These can be applied simultaneously with the main currency line or at a later date. The documentation requirements for multi-currency lines align with those for the standard line, with unique tradable instrument display mnemonics and London SEDOL codes.
To prevent potential delays in admission, the Exchange has set specific timeframes for submitting draft Static Data Forms based on the volume of securities due to admit. This ranges from 24 hours for batches of less than 10 to three weeks for batches of 50 and above.
