As the demand for crypto-based exchange-traded products (ETPs) is increasing, the Australian financial markets watchdog is seeking public feedback on such retail investment instruments.
The Australian Securities and Investments Commission (ASIC) released a consultation paper on Wednesday that covers ‘crypto-assets as underlying assets for ETPs and other investment products’. The regulator thinks these products have unique features and risks that need to be recognized by market operators and product issuers.
The key areas where the consultation paper needs feedback are on identifying crypto-assets that are appropriate underlying assets and establishing good practice in respect of pricing, custody, risk management and disclosure.
“The proposals set out good practices for market operators and product issuers regarding crypto-asset ETPs and other investment vehicles that provide retail investors with exposure to crypto-assets,” ASIC Commissioner Cathie Armour said in a statement.
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The Aussie regulator will continue to accept feedback until July 27 and then issue a feedback report. In addition, it is planning to publish ‘final information’ on good market practices.
“Market operators and product issuers need to be mindful of meeting their existing regulatory obligations when creating, operating and allowing such products, so they can be facilitated in a way that maintains investor protections and Australia’s fair, orderly and transparent markets,” Armour added.
Push for Crypto Investment Products
While Australia is still in the consultation stage for approving crypto ETPs, these products have boomed in other jurisdictions, especially Europe. Several European stock exchanges have listed crypto-linked ETPs, and these products are gaining a lot of popularity as well.
However, one of the major targets for the crypto industry to gain approval for a Bitcoin exchange-traded fund (ETF) in the United States, which still seems to be nowhere near its goal even after years of push.