London Stock Exchange Set to Debut Bitcoin and Ethereum ETN Market on May 28

The London Stock Exchange has declared the opening of a market for exchange-traded notes (ETNs) for Bitcoin (BTC) and Ethereum (ETH). The main stock exchange in the United Kingdom said on Monday that the Crypto ETNs would be live on May 28.

London Stock Exchange to Launch Crypto ETNs Trading on May 28, 2024

The stock exchange had previously declared that in the second quarter of 2024, it will consider applications for the admission to trade Ethereum Crypto ETNs and Bitcoin.

As per the most recent information, the London Stock Exchange will begin to accept applications on April 8, 2024, for the trading of these cryptocurrency ETNs.

Nonetheless, the market will need to receive the Financial Conduct Authority’s (FCA) clearance, as the UK regulator would be involved.

“We have decided to launch the market in Crypto ETNs on 28 May 2024 to enable the maximum number of issuers to be present in the market on the first day of trading,” the LSE stated. “In choosing this date, we have taken into consideration that we need to ensure that issuers meet the requirements for consideration detailed in the Crypto ETN factsheet, and importantly, it will also enable those issuers planning on admitting securities on the launch date, time to prepare documentation to establish a Crypto ETN programme which will require a base prospectus to be approved by the FCA.”

Exchange-traded notes (ETNs) provide exposure to a variety of assets, but in a different format than ETFs. Investors that use exchange-traded funds (ETFs) have a partial ownership stake in the product’s stock or other holdings. ETNs operate more like a bank’s unsecured debt notes. The bank invests the money it receives in assets that follow a particular index. Although those assets’ performance is reflected in the ETN’s value, the issuer does not own the underlying assets.

London Stock Exchange Imposes Deadline for Crypto ETNs Listing Amid Market Struggles

Applications for crypto ETNs to be listed on the main market must be submitted by issuers to the LSE by April 15th. The LSE stated that as part of their application, they must submit: “(1) A letter setting out details of how the issuer and/or the Crypto ETN meets the requirements for consideration detailed in the crypto ETN factsheet, and (2) A draft of the base prospectus highlighting where disclosure of matters set out in (1) above, is included in the base prospectus.”

The announcement stated that Issuers will not be permitted to take part in the first day of ETN trading if:

• a) The Issuer has not satisfied the Exchange that it has met the requirements for consideration set out in the Crypto ETN factsheet
• b) An Issuer’s application for admission is submitted to the Exchange after the 15 April 2024; and/or
• c) An Issuer’s base prospectus has not been approved by the FCA by midday on Wednesday, May 22, 2024.

The FCA said earlier this month that it will not reject proposals from Recognised Investment Exchanges (RIEs) to list an ETN market segment. These initiatives are part of the U.K. government’s attempts to turn the nation into a centre for cryptocurrency by making it more crypto-friendly.

The future Ethereum and Bitcoin ETNs will only be available to “professional investors” in accordance with FCA requirements. This implies that the only parties permitted to engage in the financial markets will be credit institutions and investment businesses; regular investors will not be permitted to participate.

The LSE’s action coincides with the exchange’s struggles to remain relevant. Bloomberg reports that trading activity has drastically declined from pre-crisis levels, while the number of firms listed on the LSE has plummeted dramatically, with 2023 being the worst year for IPOs since 2009.