ASIC Consults on A New License Category for Crypto-based ETPs

​Australian Securities and Investments Commission (ASIC) has released a new Consultation Paper recently, consulting on exchange-traded products (ETPs) and other investment products that provide retail investors with exposure to crypto-assets.

The consultation includes creating a new asset kind that can be selected when applying for a new AFS license (or a variation to an existing AFS license), to cover crypto-assets.

These products are showing distinctive features and risks that need to be made aware of by market operators and product issuers while performing their functions and meeting existing regulatory obligations, according to the Aussie regulator.

Key areas of focus for market operators and issuers in the Consultation Paper include:

- identifying crypto-assets that are appropriate underlying assets;

- 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," said ASIC Commissioner Cathie Armour.

Crypto-asset ETPs have attracted a lot of attention around the world. Domestic crypto-asset ETPs have sparked interest and demand, according to ASIC. However, if these goods are not produced and operated appropriately, there is a significant potential of harm to customers and markets.