UK FCA proposes 10% crypto ETN exposure for retail funds

The United Kingdom's Financial Conduct Authority has proposed allowing authorized retail investment funds to allocate up to 10% of their assets to crypto exchange-traded notes (ETNs). The proposal, published on June 8, 2026, as part of the regulator's 52nd quarterly consultation paper, would enable mainstream portfolios to gain regulated exposure to digital assets for the first time.

The measure is designed to close a regulatory gap. While the FCA lifted a ban in October 2025, allowing individual retail investors direct access to crypto ETNs, authorized funds had remained effectively barred. The new proposal would permit UCITS funds and most non-UCITS retail funds to invest in these products, provided the total allocation does not exceed the 10% cap. The consultation period is open until July 13.

According to the FCA, the 10% limit is intended to manage risk and prevent funds from being reclassified as restricted mass-market investments, which would complicate their status as mainstream retail products. Fund managers would be required to ensure any ETN holdings align with a fund's stated investment objectives and risk profile. Funds would be allowed to hold crypto ETNs listed on...