Industry observers are pushing for the Financial Conduct Authority in the UK to expand support for crypto products beyond institutional investors. They advocate for allowing retail customers to trade physically backed exchange traded notes (ETNs), which would bring the UK in line with advancements made in the US and other countries. The FCA recently updated its position on crypto ETNs, stating that recognized investment exchanges can list these offerings without objection. ETNs are debt securities that provide access to the underlying asset. Just like the recently approved bitcoin ETFs in the US, these products allow investors to trade securities that follow the performance of crypto assets on an exchange during trading hours. The FCA’s endorsement of crypto ETNs is conditional on them being limited to professional investors such as investment firms and credit institutions, according to a statement released by the regulator on Monday. As a result of this decision, the London Stock Exchange announced on Monday that it will begin accepting applications for physically backed bitcoin and ether ETNs in the second quarter. Learn more: London Stock Exchange to consider proposals for physically backed crypto ETNs. The FCA stated that exchanges and professional investors should be able to more easily assess if crypto ETNs are suitable for their risk appetite, but warned that these products, along with crypto derivatives, are not appropriate for retail consumers due to the potential risks involved. A representative from the FCA refused to provide additional information other than the provided statement. Tim Bevan, the CEO of ETC Group, expressed his disappointment that retail investors are still unable to trade crypto ETNs on regulated markets. According to Bevan, there are no restrictions in place for opening a direct cryptocurrency account. He believes that if UK regulations allowed retail investors to invest in crypto ETPs through regulated markets, it would align the UK with much of Europe and provide added security for retail investors. The FCA initially banned the sale of crypto derivatives and ETNs to retail consumers in January 2021, but the landscape has evolved significantly since then. Laura Navaratnam, UK policy lead at the Crypto Council for Innovation, stated that the commercial and regulatory environment for cryptocurrencies has changed, referencing the approval of spot bitcoin ETFs by the SEC in the US in January. Jacobi Asset Management introduced Europe’s initial bitcoin ETF on the Euronext Amsterdam exchange in August, even though crypto ETNs have been available throughout the continent for a number of years. Navaratnam stated to Blockworks that, with these advancements, it would be logical for the FCA to reassess the prohibition on retail clients. CCI would prioritize additional work on this because the timelines for the future regulatory regime for crypto assets are uncertain. Mandy Chiu, who leads financial product development at the crypto asset management firm 21.