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UK ETN and Derivative Banning Regulation Becomes Operative

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The United Kingdom’s embargo on the trading of Derivatives and Exchange Traded Notes (ETNs) to retail investors that came to law last year has become operative yesterday, the 6th of January, 2021.  The Financial Conduct Authority of the UK had made this ban October last year.

The United Kingdom states that derivatives and ETNs may be more of a loss than a plus to her retail investor citizens, looking at the nature of the products.   

Crypto analysts have backlashed the new regulation stating that it is the ultimate impediment to financial growth. They wonder why retail investors should not have the same investment prospects as institutional investors.

Dermot O’Riordan, a partner at Eden Block, which is a European Blockchain Venture Capital firm notes that retail investors will go ahead to circumvent this regulation by going unto unregulated platforms like BitMEX even though they will have less protection on these platforms.

With a prior knowledge that the UK government will ban ETNs and derivatives, Hargreaves Lansdown, an investment firm based in the UK pre-empted their move by un-listing products such as the XBT bitcoin (BTC, +9.19%) tracker from its exchange.

Danny Cox, notes in addition:

“Investors are no longer able to buy these products through HL, but they can continue to hold investments that they already own, and can sell them when they wish to do so,” 

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