The Financial Conduct Authority’s ban on crypto exchange traded notes, or ETNs, was lifted on Wednesday to much fanfare from crypto fans. 

The new products offering a new way to include cryptocurrencies in an investment portfolio. 

ETNs are similar to more common ETFs, in that they are stock market-listed and pool investors’ money to hold assets, but they carry more risk. 

They allow investors to gain access to digital currencies via products that are traded on stock exchanges, and track the price of the asset without investors holding it directly.

ETNs differ to physical ETFs as they do not have to hold the assets they track. Instead, the provider can aim to match the return of the index however they choose.

Figures from investing platform IG suggest that the UK’s crypto market could grow by some 20 per cent as new investors look to pile into these new crypto products.

However, any keen investor looking to get in early will have been disappointed to find that despite the ban lifting, these ETN products are still not available to retail investors.

Wait: Investors will have to wait until at least 13 October before they are able to but crypto ETNs, despite the FCA’s ban being lifted

In fact, investors will have to wait until at least 13 October before they are able to but crypto ETNs.

The delay comes as a result ETN providers being required to submit their prospectuses for FCA approval before they can offer these products.

However, the FCA only began accepting draft prospectuses on 25 September.

According to Financial Times sources, one person familiar with the matter said the FCA and the London Stock Exchange were ‘going back and forth’ on whether they needed a new segment of the exchange for these crypto products.

Thomas Brown, partner at law firm Shoosmiths, said: ‘The delay has been described as concerning, especially given that European and US retail investors already enjoy access to similar products.’

He said the regulator’s decision to only accept prospectuses two weeks before the lifting of the ban gave insufficient time for its discussions with the LSE over a possible new crypto ETN segment of the exchange.

Harvey Knight, partner and head of the UK financial services regulatory team at Withers, said: ‘The delay is not necessarily a mere operational blip but quite symptomatic of how the UK has handled its approach to crypto and digital assets more generally.’

The FCA, however, said the opposite was true. 

A spokesperson told This is Money: ‘We had to wait until the segment opened on the LSE before we could start reviewing prospectuses. That happened on 23 September, and we started accepting prospectuses for review two days later.

‘We are progressing policy development in support of the development of a sustainable, competitive crypto sector. We want to rebalance risk, and lifting the ETN ban allows people to make the choice on whether such a high-risk investment is right for them.’

When the FCA announced that the ETN ban would be lifted back in August, it said it would begin to review prospectuses after recognised UK exchanges admitted crypto ETNs to retail investor markets.

Nick Jones, chief executive of crypto infrastructure firm Zumo, said: ‘Practically, retail access to these crypto ETN products goes through the authorised retail brokers. While at least some have stated a public commitment to make the products available from today’s ban lifting date, others have stated timelines into next year, while a number are yet to make any public comment.

‘Part of the issue is that these products have been labelled as Restricted Mass Market Investments and therefore come with a significant compliance process, including consumer appropriateness tests, that providers must now complete to offer these products.’

These assets are more risky than more common exchange traded products like physical ETFs, which hold the assets they track. ETN providers can match the return of the asset in any way they wish.

Knight said: ‘The products must be structured as ETNs traded on a recognised investment exchange, which retail customers should be aware embeds counterparty/issuer risk rather than true asset ownership.’

There are 17 crypto ETNs listed on the London Stock Exchange, all of which have been only available for institutional investment over the past year. These include products from WisdomTree, Fidelity and Invesco.

These products can be held within Isa wrappers and registered pension schemes, His Majesty’s Revenue & Customs confirmed on Wednesday, meaning that investors can now gain tax-free exposure to cryptoassets for the first time.

HMRC said: ‘Crypto ETNs will be automatically eligible for inclusion in stocks and shares Isas.’

However, from April next year, they will be reclassified as qualifying investments for innovative finance Isas and at that point become ineligible to stocks and shares Isas.

HMRC said: ‘The government will keep the inclusion of in tax-advantaged accounts under review with a view to including them in the stocks and shares at a later date as the market matures and as consumer understanding deepens.’