UK Trends and Developments Contributed by: Carolyn Jackson, Nathaniel (Nate) Lalone, Christopher Collins and Ciara McBrien, Katten Muchin Rosenman UK LLP (Katten)
consultation closed in mid-July 2025, and final rules to implement the relaxation of the ban on cETNs were
counterparty authorised under the European Market Infrastructure Regulation, and would therefore be sub - ject to margin and other risk management require - ments that are designed to ensure the financial integ - rity of such transactions and, by the act of clearing, limit risks to the wider market and investors gener - ally. Furthermore, regulatory obligations applicable to brokers dealing with UK retail clients that transact in derivatives also provide significant and robust retail protections. Such protections include obligations relating to product information and disclosure, suit - ability and appropriateness assessments, and, pur - suant to the FCA’s Consumer Duty, the overarching requirement for such brokers to act in the best inter - ests of their clients. Final Thoughts The cryptoasset markets and the UK have come a long way since the FCA’s ban on retail trading in cryp - toasset derivatives in 2021. The depth and liquidity of the cryptoasset markets, and their related deriva - tives markets, have grown at a phenomenal pace, and many leading jurisdictions have enthusiastically embraced the opportunities presented by this new and dynamic asset class. While the UK had initially moved gingerly in relation to cryptoassets and cryp - toasset derivatives, in recent years it has been very active in extending the financial services regulatory perimeter to bring more and more activities within the scope of supervision and oversight. The latest initiative – to lift the retail trading ban on RIE-listed ETNs – represents the most significant deregulatory step yet taken by the UK authorities in this area. While a welcome development, it should represent only the first stage of opening up the UK’s retail sector to cryptoasset derivatives. The FCA should next consider lifting the ban on all cryptoas - set derivatives listed for trading on a UK RIE. These products would need to meet standards equivalent to those applicable to cETNs that will be available to retail investors. In fact, permitting such trading by UK retail investors would bring the UK in line with other leading jurisdictions and constitute the next logical step in expanding access by UK retail investors to this burgeoning new market.
published in August 2025. Prospects for the Future
What does the FCA’s newfound openness to cryp - toasset derivatives – or at least to certain cryptoasset derivatives – portend for the future? While it may be too much to expect a complete reversal of the retail trading ban in the short term, there are solid reasons for extending the basis for permitting RIE-listed cETNs to other RIE-listed products. In fact, all financial instru - ments listed for trading on a UK RIE – including cryp - toasset derivatives – would need to meet similarly stringent regulatory requirements as a precondition to being listed. For example, a UK RIE must have rules to ensure that all products it lists for trading are capable of being traded in a fair, orderly and efficient manner and, spe - cifically in relation to derivatives, that such products are designed to allow for orderly pricing and efficient settlement. A UK RIE must also have appropriate sys - tems and controls to monitor transactions, including to detect instances of market abuse. In addition, a UK RIE must provide notice to the FCA before listing a new contract for trading, including providing the terms and conditions of the product. A UK RIE would only be able to list a cryptoasset derivative for trading when all such standards have been met. These standards also ensure that, where a UK RIE does list a new financial instrument for trading, the instrument is suitable for trading by all investors, including retail, even if, in practice, the UK retail pres - ence in the financial markets is comparatively limited. This is the case even where the underlying reference asset is prone to a certain level of price volatility; in this regard, we note that, as already mentioned above, the price volatility for the most liquid cryptoassets is no greater than that of other commonly accepted ref - erence assets underlying exchange-traded derivatives listed on UK RIEs. We would further note that cryptoasset derivatives concluded on UK RIEs would, as with any other UK RIE-listed derivatives, need to be cleared at a central
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