ASIC Seeks Consultation on Crypto-Asset Based ETPs

ASIC has released a consultation paper that seeking various opinions about the use of Crypto-assets as underlying assets for ETPs and other investment products.

June 30, 2021, | AtoZ Markets – The Australian Securities and Investments Commission (ASIC) is seeking public feedback on crypto-based exchange-traded products (ETPs) as the demand for such retail investment instruments increases.

The move comes as governments and regulators worldwide try to regulate the digital assets industry in the wake of rising investor affinity for cryptocurrencies, which are volatile and risky for users and financial institutions.

The flagship cryptocurrency Bitcoin has seen its price swing wildly this year, trading over the $35,500 level on Wednesday after hitting an all-time high of just under $65,000 in mid-April.

ASIC Launches New Consultation on Crypto ETPs

According to the announcement on Wednesday, ASIC released a consultation paper that covers ‘crypto-assets as underlying assets for ETPs and other investment products’. The Aussie 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.

The Australian financial markets watchdog will continue to accept feedback until July 27 and then issue a feedback report. What is more, ASIC 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.

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