The Financial Conduct Authority (FCA), overseeing the UK‘s financial markets, has published proposals aimed at reforming investment rules and is consulting the cryptocurrency industry for its perspective.
In papers made public on Monday, the regulator invited crypto companies to share their views on plans to widen consumer access to investment opportunities and to update regulations governing client categorization and conflicts of interest.
The discussion document pointed out that significant losses on high-engagement trading apps were predominantly linked to cryptoasset and CFD trading. It expressed concern over investment pathways that offer exposure to cryptoassets but bypass standard protective measures like appropriateness tests.
A central element of the consultation is a planned update to guidance. This update would clarify that trading experience primarily in high-risk speculative products or cryptoassets should not, by itself, be used to designate a client as a professional, barring other strong qualifying factors.
The FCA indicated that these proposed adjustments are intended to refine and simplify its existing rulebook. The overarching strategy is to eliminate certain prescriptive checks and instead empower firms to take greater responsibility for accurate client assessments.
Companies operating in the digital asset space, particularly those offering advice or sales, are expected to submit their feedback on these recommendations by the deadlines set for February and March.
