Swiss regulator gives green light to first crypto fund for professional investors
The Swiss financial supervisory authority FINMA has approved
the first crypto fund, named Crypto Market Index Fund, for distribution to
qualified investors, including pension funds.
Asset management firm Crypto Finance Asset Management runs
the fund in partnership with fund management firm PvB Pernet von Ballmoos; SEBA
Bank is the fund’s custodian.
The bank has been granted a licence to act as custodian for
Swiss collective investment schemes under article 72 CISA (KAG), it said.
The crypto fund tracks the SIX Crypto Market Index 10, which
measures the performance of the largest and most liquid crypto assets and
tokens, and provides a benchmark for the asset class.
Bernadette Leuzinger, chief executive officer at Crypto
Finance, said: “The investment fund enables clients of innovative wealth and
asset management firms to participate in this upcoming asset class and to
further diversify their portfolio in a secure and regulated way.”
According to FINMA, the Crypto Market Index Fund operates
under the category “other funds for alternative investments” with particular
risks, and distribution is restricted to qualified investors.
The regulator acknowledged that crypto assets involve
particular risks, therefore it has given its approval to the operation of the
fund specifying a series of requirements.
The fund, according to the regulator, may only invest in
established crypto assets with a sufficiently large trading volume.
The exact specifications with regards to crypto assets with
sufficiently large trading volumes are part of the fund contract and relate to
the minimum requirements for the average market capitalisation of the past 30
days as well as the daily liquidity, a spokesperson for FINMA told IPE.
The investments must be made through established
counterparties and platforms that are based in a member country of the
Financial Action Task Force (FATF), and that are subject to corresponding
anti-money laundering regulations, it said.
Specific requirements apply with regards to risk management
and reporting for the institutions involved in the management and custody.
Risk management should also capture in particular
technological and operational risks, such as the integrity of the blockchain,
safe custody and transfer of assets. It must also take into account additional
legal and compliance risks or specific counterparty risks, for example in
connection with unregulated trading venues and brokers, the spokesperson said.
The reporting includes key developments in the fund and
information on how the institution involved deals with the specific risks of
the product, the spokesperson added.
In Germany, investors are starting to get familiar with
crypto assets following the introduction of a law allowing Spezialfonds to
invest one fifth of their funds in the new asset class.
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