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Finance
New.Bitcoin.com has confirmed that the exchange-traded product that tracks an index of five major cryptocurrencies will begin trading on Switzerland's main stock exchange on November 21st. The exchange also confirmed that this product is not a fund traded on an exchange (ETF). The country's financial regulator, Finma, explains the differences.
Read also: Yahoo! Japan confirms entry into cryptographic space
Differences between ETP and ETF
<img class = "size-medium wp-image-248031 alignright” title=”Launch of the Swiss Crypto Exchange traded product on 21 November, but not an ETF” src=”https://news.bitcoin.com/wp-content/uploads/2018/11/six-logo-300×176.jpg” alt=”Exchange of Swiss-Traded encrypted products on 21 November, but not an ETF "width =" 300 "height =" 176 "srcset =" https://news.bitcoin.com/wp-content/uploads/2018/11/ six-logo-300×176.jpg 300w, https://news.bitcoin.com/wp-content/uploads/2018/11/six-logo-768×451.jpg 768w, https://news.bitcoin.com/wp- content / upload / 2018/11 / six-logo-696×409.jpg 696w, https://news.bitcoin.com/wp-content/uploads/2018/11/six-logo-715×420.jpg 715w, https: // news.bitcoin.com/wp-content/uploads/2018/11/six-logo.jpg 1004w "sizes =" (maximum width: 300px) 100vw, 300px”/>The news of the cryptocurrency product market (ETP) by Zug, Amun AG, having been approved by the Swiss main stock exchange, the Six Swiss Exchange, has spread throughout the crypto community over the weekend.
The product keeps track of an index of five major cryptocurrencies: BTC, XRP, ETH, BCH and LTC. While Amun's website refers to this product only as an ETP, some believe it is a fund traded on an exchange (ETF).
<img class = "size-medium wp-image-248039 alignright” title=”Launch of the Swiss Crypto Exchange traded product on 21 November, but not an ETF” src=”https://news.bitcoin.com/wp-content/uploads/2018/11/finma-logo-300×94.jpg” alt=”Exchange of Swiss-Traded encrypted products on 21 November, but not an ETF "width =" 300 "height =" 94 "srcset =" https://news.bitcoin.com/wp-content/uploads/2018/11/ finma-logo-300×94.jpg 300w, https://news.bitcoin.com/wp-content/uploads/2018/11/finma-logo-768×241.jpg 768w, https://news.bitcoin.com/wp- content / upload / 2018/11 / finma-logo-696×218.jpg 696w, https://news.bitcoin.com/wp-content/uploads/2018/11/finma-logo.jpg 880w "sizes =" (max. width: 300px) 100vw, 300px”/>ETPs and ETFs are two different products, listed in different categories on Six Swiss Exchange.
A spokesperson for Finma, the financial regulator of Switzerland, told us at news.Bitcoin.com:
It is important to separate the ETPs from the ETFs, as the ETPs are not subject to the Collective Investment Schemes Act (CISA) and are therefore not controlled by Finma.
Noting that ETFs "are funds traded on an exchange and normally track the performance of an index", he underlined that "in Switzerland, these products are subject to CISA".
A spokesman for Six Swiss Exchange also confirmed to news.Bitcoin.com that Amun Crypto is an ETP, not an ETF, adding that the product will begin to be marketed on Wednesday 21 November. The exchange clarified:
ETPs are collateralised bearer debt securities, with no interest, that replicate an underlying [asset] (generally from the raw materials sector) on a regular or leveraged basis. Like ETFs, they trade in a multi-product segment, but in legal terms they are not funds.
ETF, ETP and ETN
On its website, Sei Swiss Exchange presented various types of "passive financial products in Switzerland". The first two on the list are ETF and ETP.
<img class = "size-full wp-image-248047 aligncenter” title=”Launch of the Swiss Crypto Exchange traded product on 21 November, but not an ETF” src=”https://news.bitcoin.com/wp-content/uploads/2018/11/etf-etp.png” alt=”Launch of the product exchanged Swiss Crypto Exchange on 21 November, but not an ETF "width =" 1000 "height =" 204 "srcset =" https://news.bitcoin.com/wp-content/uploads/2018/11/ etf-etp.png 1000w, https://news.bitcoin.com/wp-content/uploads/2018/11/etf-etp-300×61.png 300w, https://news.bitcoin.com/wp-content/ upload / 2018/11 / etf-etp-768×157.png 768w, https://news.bitcoin.com/wp-content/uploads/2018/11/etf-etp-696×142.png 696w "sizes =" (max. width: 1000px) 100vw, 1000px”/>
The document indicates that FTEs include exchange-traded notes (ETNs) and exchange-traded commodities (ETCs). ETNs are a type of debt security that trades on exchanges and promises a return linked to a market index or another benchmark. ETCs also exchange trades but provide exposure to commodities and commodity indices.
<img class = "size-medium wp-image-248053 alignright” title=”Launch of the Swiss Crypto Exchange traded product on 21 November, but not an ETF” src=”https://news.bitcoin.com/wp-content/uploads/2018/11/trading-300×199.jpg” alt=”Launch of the product exchanged Swiss Crypto Exchange on 21 November, but not an ETF "width =" 300 "height =" 199 "srcset =" https://news.bitcoin.com/wp-content/uploads/2018/11/ trading-300×199.jpg 300w, https://news.bitcoin.com/wp-content/uploads/2018/11/trading-768×509.jpg 768w, https://news.bitcoin.com/wp-content/uploads/ 2018/11 / trading-1024×678.jpg 1024w, https://news.bitcoin.com/wp-content/uploads/2018/11/trading-696×461.jpg 696w, https://news.bitcoin.com/wp- content / upload / 2018/11 / trading-1068×708.jpg 1068w, https://news.bitcoin.com/wp-content/uploads/2018/11/trading-634×420.jpg 634w, https: //news.bitcoin. it / wp-content / uploads / 2018/11 / trading.jpg 1135w "sizes =" (maximum width: 300px) 100vw, 300px”/>Furthermore, ETFs and ETPs also entail different risks. "ETFs are separate business groups", the Swiss asset management and asset management company described in its report on ETFs and index funds. "In the event of insolvency (bankruptcy) of the supplier (for example, the fund management company or the custodian bank), the assets and rights of the ETF can be separated and there is no issuer risk in this regard." Debt securities, however, "often involve a risk of issuer difficult to calculate," noted the author of the report.
The public misunderstanding led to the suspension of trade
<img class = "size-medium wp-image-248057 alignright” title=”Launch of the Swiss Crypto Exchange traded product on 21 November, but not an ETF” src=”https://news.bitcoin.com/wp-content/uploads/2018/11/sec-300×206.jpg” alt=”Launch of the product exchanged Swiss Crypto Exchange on 21 November, but not an ETF "width =" 300 "height =" 206 "srcset =" https://news.bitcoin.com/wp-content/uploads/2018/11/ sec-300×206.jpg 300w, https://news.bitcoin.com/wp-content/uploads/2018/11/sec-768×526.jpg 768w, https://news.bitcoin.com/wp-content/uploads/ 2018/11 / sec-100×70.jpg 100w, https://news.bitcoin.com/wp-content/uploads/2018/11/sec-218×150.jpg 218w, https://news.bitcoin.com/wp- content / upload / 2018/11 / sec-436×300.jpg 436w, https://news.bitcoin.com/wp-content/uploads/2018/11/sec-696×477.jpg 696w, https: //news.bitcoin. it / wp-content / uploads / 2018/11 / sec-613×420.jpg 613w, https://news.bitcoin.com/wp-content/uploads/2018/11/sec.jpg 1016w "sizes =" (max. width: 300px) 100vw, 300px”/>The products traded on the stock exchange of XBT Provider were also misunderstood by the public.
In September, the US Securities and Exchange Commission (SEC) temporarily suspended trading in company products – Bitcoin Tracker One and Ether Tracker One – due to inconsistencies in their descriptions.
The commission wrote:
Broker-dealer application materials submitted to allow the offering and sale of these financial products in the United States, as well as certain trading websites, characterize them as "exchange traded funds (ETF)" … Other Sources Publicities characterize the instruments as "exchange" traded notes (ETNs) & # 39;
Furthermore, the SEC noted that "the issuer characterizes them in its offer materials as" non-share certificates ", which" are not principally protected "and" do not bear interest ".
Citing "a lack of current, consistent and accurate information" of the two investment vehicles that were "in confusion among market participants regarding these financial instruments", the SEC justified its decision to suspend their negotiations.
What do you think of EUN Crypto ETP trading on Six Exchange? Let us know in the comments section below.
Images courtesy of Shutterstock, Six Swiss Exchange and Finma.
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