The London Stock Exchange (LSE), renowned for its array of blue-chip stocks, is set to make a major move in the cryptocurrency realm with the debut of Bitcoin and Ethereum exchange-traded notes (ETNs) on May 28, as announced in a notice released by the exchange.
This development follows the exchange’s earlier announcement that it would commence accepting applications for crypto ETNs in the second quarter of this year.
The LSE confirmed that companies interested in listing their Bitcoin and Ethereum ETNs on the new market can commence submitting their applications from April 8 onwards.
In preparation for the scheduled launch, issuers will have ample time to meet listing requirements and compile necessary documentation, including a prospectus subject to approval by the Financial Conduct Authority (FCA), the LSE emphasized. The exchange’s objective is to facilitate maximum issuer participation on the inaugural day.
To be eligible for the initial offering, issuers must furnish a comprehensive letter and a draft base prospectus by April 15, showcasing their adherence to the stipulated requirements outlined in the Crypto ETN factsheet.
Approval of these prospectuses by the FCA is imperative for the listing of ETNs on both the Main Market and the Official List, as per the LSE’s directive.
The LSE underscored that issuers failing to meet the requisite criteria or missing submission and approval deadlines will be unable to partake in the launch of the LSE’s Crypto ETN market.
Similar to exchange-traded funds (ETFs), ETNs provide exposure to a diversified range of assets, albeit with distinct structural disparities. While an ETF represents partial ownership of underlying assets, an ETN resembles an unsecured debt note issued by a bank, wherein the proceeds are invested in assets tracking a specific index. The ETN’s value mirrors the performance of these assets.
Under the prevailing FCA regulations, the forthcoming Bitcoin and Ethereum ETNs will be exclusively accessible to “professional investors,” encompassing credit institutions and authorized investment firms. Retail investors, however, will be precluded from participation.
In light of recent challenges outlined in a Bloomberg report, the LSE is grappling with a decline in listed companies and diminished trading activity compared to pre-crisis levels.
To counter these setbacks and maintain its stature as a premier financial hub, the LSE is strategically venturing into the booming digital asset market, catering to increasing institutional investor interest.
By establishing a regulated and secure digital asset environment, the LSE aims to attract investments and fortify the UK’s position in the digital asset economy.
