The European Fund and Asset Management Association (EFAMA) does not expect new asset classes, such as cryptocurrencies, to be added to exchange-traded funds (ETFs) after a recent review of UCITS-eligible assets.
Many had hoped that the May consultation would open the door for cryptocurrencies and commodities within the UCITS framework. However, Federico Cupelli, EFAMA’s deputy director for regulatory policy, dismissed this possibility.
“I would not expect a surge of new asset classes for ETFs,” Cupelli told ETF Stream. He noted that any expansion would be gradual and dependent on regulators’ comfort with the underlying assets, such as physical commodities.
Diverging Regulations Across Europe Prompt ESMA’s Re-evaluation
UCITS, a European regulatory structure for managing and selling investment funds, aims to protect investors and ease cross-border fund sales. However, different interpretations of UCITS rules across European countries have led the European Securities and Markets Authority (ESMA) to reassess these regulations.
Cryptocurrencies, especially as exchange-traded products (ETPs), have been a key focus in this review. Their rising popularity in Europe, along with the recent approval of spot bitcoin ETFs in the United States, has sparked debate on whether they should be allowed within UCITS funds.
EFAMA Calls for Consistency, Advises Against Rapid Crypto Inclusion
EFAMA advises against a complete overhaul of UCITS rules. However, the association calls for clearer guidelines at the European level to ensure consistency across countries.
EFAMA suggests that investing in cryptocurrencies through exchange-traded products offers a simpler option. This method avoids the complexities of directly holding digital assets.
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