21Shares called on European financial watchdogs to create a “unified regulatory framework” to include crypto assets within the UCITS framework.
In response to an industry-wide review of the UCITS Eligible Assets Directive by the European Securities and Markets Authority (ESMA), crypto exchange traded product (ETP) issuers have stated that current rules are “inconsistent across Europe” and that investors He said it was causing “confusion”.
Regulations regarding the inclusion of cryptoassets in UCITS funds vary across Europe, with national regulators interpreting the rules differently.
For example, German regulator BaFin allows UCITS funds to purchase crypto exchange traded notes (ETNs), while Spanish regulator National Market Commission (CNMV) also allows them to incorporate derivatives. Exposure is permitted provided that the
21Shares said ESMA should establish “clear and consistent guidelines” on indirect access to virtual currencies that apply to all member states.
It also said a lack of a common approach could lead to gaps in investor protection, leading many investors to turn to “more expensive and less professionally managed” exposures. added.
“The current patchwork of regulations creates confusion and prevents retail investors from leveraging the full potential of crypto assets,” said Mandy Chiu, head of financial product development at 21Shares. .
“By providing consistent rules across Europe, ESMA could open new avenues for investors to diversify and strengthen their portfolios in a regulatory environment aimed at protecting investors.
“A unified regulatory stance will allow Europe to be at the forefront of financial innovation. Clear guidance from ESMA will not only promote market stability and investor protection, but also encourage further growth in the crypto asset sector. It will foster growth and development.”
ESMA launched a consultation in May to clarify which financial products would be subject to UCITS, including leveraged loans, AT1 bonds, commodities, emissions allowances and cryptocurrencies.
However, the European Fund Asset Management Association (EFAMA) said it did not expect “a new wave of ETF asset classes” to emerge following the review.
In its response, EFAMA said changes to the guidelines could foster “greater convergence between member states”, but added that the topic of inclusion was too “broad and nuanced” to be addressed in consultations. Ta.
It added that any findings “will not damage the reputation” of the UCITS brand.
