Prohibiting the sale to retail clients of investment products that reference cryptoassets [pdf]

The Financial Conduct Authority, FCA, has published the opinion of the Regulatory Policy Committee (RPC) as regards the FCA’s Policy (PS20/10) to ban the sale, marketing, and distribution of crypto-assets to retail clients which was implemented and came into force on January 6, 2021.
In its opinion, the Committee states that it does NOT find the policy statement fit for purpose based on the following reasoning:
1. the FCA failed to demonstrate „what would happen to the market in the absence of the intervention, limiting the ability to determine the change resulting from the measure“;
2. the FCA did not, or insufficiently demonstrate(d) the impacts of the policy, e.g. on financial innovation or on consumer behavior; and
3. the FCA did not provide sufficient evidence as to the impact of the policy upon small and medium-sized firms.
Additionally, the RPC criticized the FCA’s limited explanation as to the rationale behind the measure and the lack of a clear definition of „unregulated transferable crytoassets“.