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FCA Launches Consultation Paper on Crypto Asset Guidance

Finance Magnets | | Jan 23, 2019

FCA Christopher Wollard - FCA Launches Consultation Paper on Crypto Asset GuidanceOnce finalised the “Guidance of Cryptoassets” will outline the crypto asset activities the FCA regulates.

The Financial Conduct Authority (FCA) has today released a consultation paper on the “Guidance of Cryptoassets”, which once finalised, will outline the crypto asset activities it regulates.

Once market feedback has been received, the final Guidance will allow market participants to better understand if the crypto assets they use are within the regulatory perimeter.

In addition, it will further outline whether businesses operating within the nascent cryptocurrency industry need to be authorised and what rules or regulations apply to their business.

Specifically, the guidance takes a look at where crypto assets would be considered as: “‘Specified Investments’ under the Regulated Activities Order (RAO), ‘Financial Instruments’ such as ‘Transferable Securities’ under the Markets in Financial Instruments Directive II (MiFID II), or captured under the Payment Services Regulations (PSRs), or the E-Money Regulations (EMRs). It also covers where cryptoassets would not be considered ‘Specified Investments’ under the RAO.”

FCA aims to create greater clarity in the crypto sector

According to the FCA, the consultation paper is in response to the industry’s need for greater clarity. It also follows on from the UK crypto asset Taskforce’s recommendation that the British watchdog provide additional guidance on the current regulatory perimeter.

See:  FCA: Regulating innovation: a global enterprise

Before the guidance can be finished, the FCA is seeking feedback from market participants. From today, the regulator has allowed a consultation of 10 weeks, with the consultation period ending on Friday the 5th of April 2019.

Commenting on the consultation paper, Christopher Woolard, the executive director of Strategy and Competition at the FCA, said: “This is a small but growing market and we want both industry and consumers to be clear what is regulated, and what isn’t. This is vital if consumers are to know what protections they’ll benefit from and in ensuring we have a market functioning as it should.”

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