Switzerland’s principal stock exchange SIX has okayed the issuance of crypto-based exchange-traded products, the first of its kind in the country.
According to a report by Financial Times, the ETP which will be known as Amun Crypto ETP with ticker symbol ‘HODL’ will track an index the top 5 crypto assets in terms of market cap and liquidity. At this time, this is allocated as bitcoin (48.69 percent), XRP (25.72 percent), ethereum (17.6 percent), bitcoin cash (5.11 percent) and litecoin (2.88 percent).
The ETP is expected to go live by Nov. 21.
But an ETP is not an Exchange-Traded Fund; the latter being a subject of debate among crypto enthusiasts and regulators as the United States SEC have rejected a couple of Bitcoin ETF proposals.
Crypto ETP versus Crypto ETF
Switzerland’s financial regulator, Finma, outlined the difference between an ETF and an ETP which is being issued. A spokesperson who spoke to crypto news outlet Bitcoin.com said that it is important to separate ETPs from ETFs noting that ETPs don’t come under the Collective Investment Schemes Act (Cisa) and are therefore not supervised by Finma while ETFs are regulated by the body. Also, ETPs and ETFs are listed under different categories on Six Swiss.
Details of Switzerland’s Amun Crypto ETP
SIX described the ETP as “collateralized, noninterest-earning bearer debt securities which replicate an underlying [asset] (generally from the commodities sector), either on a regular or leveraged basis. Like ETFs, they trade in a multi-market-making segment, but in legal terms, they are not funds.”
According to FT, the index being tracked will not include tokens pegged to fiat currencies otherwise known as stablecoins. It will also exclude privacy-based coins as well as very new and illiquid tokens. It added that the firm will charge an annual management fee of 2.5 percent.
Trading firms Jane Street and Flow Traders, which provided Seed capital for the ETP will also act as authorized participants.
Co-founder and CEO of Anum, Hany Rashwan said the ETP will benefit institutional investors as well as retail investors that cannot access cryptocurrency exchanges due to local regulations.
“The Amun ETP will give institutional investors that are restricted to investing only in securities or do not want to set up custody for digital assets exposure to cryptocurrencies,” he was quoted as saying.
Swiss interest in Crypto Assets
As Smartereum reported in July, SIX had set out to establish an out-and-out cryptocurrency trading platform which will integrate trading, settlement and custody infrastructure for digital assets like bitcoin and ICO tokens.
The SIX Digital Exchange which is described will be the first market infrastructure in the world to offer a fully integrated end to end trading, settlement and custody service for digital assets is expected to go live the second quarter of next year.