Dr Nils Bulling, Head of Digital Assets Product Domain at Avaloq, comments on the implications of the FCA’s new cryptoasset financial promotions rules, which come into force on Sunday:
“The FCA’s new rules will create greater confidence in the UK cryptoasset market, ensuring that marketing promotions are fair, clear and not misleading. At the same time, they will impact the UK’s competitive landscape. Not only will the new rules bring greater regulatory certainty for UK investors, but they will also pave the way for wealth managers to take the lead as secure, compliant providers of cryptoassets.
“Wealth managers have had strong initial success in commoditized cryptoasset services, such as trading and custody. Increasingly, given their expertise in financial services and trusted client relationships, they are seen as partners of choice for clients looking for safe and secure cryptoasset wallet facilities, for example. The next step in the evolution of their offerings is to provide investment advice on cryptoasset holdings, and the FCA’s new rules may accelerate the development of more innovative offerings.
“Traditional financial services firms already operate under the FCA’s regime for financial promotions, so their marketing strategies and material are already compliant. This experience and institutional knowledge gives wealth managers a competitive edge over crypto native firms, such as exchanges, not only when complying with the FCA’s latest requirements, but when considering how to build and market cryptoasset investment advice.
“Ultimately, we welcome any rules which bring greater stability and security to cryptoasset investing, while still fostering innovation in the financial sector. We look forward to seeing more wealth management firms disrupt this space and provide safe, compliant access to a greater range of investment opportunities.”