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Australian securities regulator issues guidelines for crypto ETPs


The Australian Securities and Investments Commission (ASIC) has published a set of requirements for admission to trading on cryptocurrency-based exchange-traded product (ETP) stock exchanges. Including managed funds, exchange-traded funds (ETFs) and structured products.

Thus, this was preceded by months of consultations with industry participants, which started in June. At that time, the regulator allowed the listing of crypto-ETFs on the Australian Securities Exchange (ASX). As long as proper protection was provided.

In order to become a proper basis for a crypto ETF, digital assets must receive a high level of institutional support, mature spot and regulated futures markets, trustworthy service providers and transparent pricing mechanisms, according to the guidance.

Bitcoin and Ethereum meet the criteria

Regarding the maturity of the spot market, ASIC considers assets according to the following criteria: the number of major platforms on which they received a listing; volume and frequency of trading activity on different platforms; commission level and bid-ask spread; structure of market participants; the share of trading activity attributable to regulated platforms; the effectiveness of arbitration between the main platforms and the consistency of pricing on them.

As of October 2021, Bitcoin (BTC) and Ethereum (ETH) meet these criteria. Therefore, the regulator stressed that it allows the addition of new assets to this list.

For each application to launch an ETF, licensed exchanges must assess whether the issuer is able to provide safe and reliable storage, as well as obtain the necessary licenses. ASIC allowed the use of the services of foreign custodians to maintain competition.

Risks of storing digital assets

Earlier in July, the ASX warned about the risks of storing digital assets on the accounts of centralized trading platforms. The exchange noted that users of the major blockchain platforms have access to assets through a bunch of public and private keys. Control over the latter, in fact, gives a person the right to dispose of funds.

Recall that by the end of October, the Australian Senate Committee to study the regulation of the cryptocurrency industry will announce regulatory recommendations, promised Senator from New South Wales Andrew Bragg.

“The review should be completed in about three weeks. We will unveil a plan aimed at bringing Australia to a leading position in the field of digital assets”. The politician expressed hope for the approval of the plan regardless of the results of the federal elections in 2022.

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