Jacobi Asset Management seeks FCA’s greenlight for Bitcoin-pegged ETF
Crypto asset manager Jacobi Asset Management has received a regulatory go-ahead for an exchange-traded fund that seeks to track the price of Bitcoin (BTC) while satisfying the laws in the UK.
The newly-launched firm said its “Jacobi Bitcoin ETF” is a centrally cleared crypto-backed financial instrument. The investment vehicle has reportedly won approval of the Financial Services Commission (GFSC) in Guernsey, a British crown dependency and island.
Fidelity’s cryptocurrency investment arm will provide custody for the ETF, which Jacobi plans to list on Cboe Europe, subject to the Financial Conduct Authority (FCA) approval. While Fidelity Digital Assets continues to be solely focused on institutional customers, this is one of the first custody service agreements that the fund manager has made public.
The open-ended fund will provide exposure to the underlying performance of Bitcoin without handling the assets directly. The exchange-traded fund is open for accredited investors only and applies a minimum subscription fee of $100,000.
If approved, Jacobi will be one of the first companies to offer the volatile crypto asset through mutual funds in Europe. Since most regulators restrict cryptocurrencies from directly being held in funds, such crypto-linked funds may be a workaround to offer bitcoin-based funds.
Jacobi Asset Management kicked off its operation in May 2021 and is headed by former Goldman Sachs investment banker Jamie Khurshid.
Commenting on the news, CEO Jamie Khurshid said: “We are excited to be launching a new secure, transparent and accessible product to track the performance of Bitcoin. We are de-risking investments in crypto by removing the technology risk associated with the physical asset and the counterparty risk associated with traditional funds or tracker products that are unregulated leveraged debt instruments. We are proud to collaborate with Europe’s leading regulated firms for a truly tier 1 offering to service market demand, subject to the necessary regulated approval. This is an exciting moment for Europe as regulatory approval comes ahead of those waiting for a decision from the U.S. Securities and Exchange Commission.”
“The Jacobi Bitcoin ETF will finally bring digital assets wholly into the mainstream investment infrastructure with the support of the leading firms we are working with. It will provide investors with the opportunity to participate directly in physically-settled Bitcoin. This new ETF provides simple, secure, accessible investing into one of the world’s most exciting asset classes via some of the world’s leading regulated entities,” added Roy McGregor, Chairman of Jacobi Asset Management and former CEO of Credit Suisse Channel Islands.
Regulators in the US are yet to approve an ETF that directly invests in cryptocurrencies, although at least a dozen issuers have filed for authorization for such a fund.
The approval of a regulated crypto derivative this year was looking far less likely this month, as the US regulators once again deferred their decision on whether to approve any of three proposed Bitcoin ETFs.
SEC Chair Gary Gensler said that he would be open to approving a bitcoin-futures ETF, but only under certain conditions. The revelation rankled some fund managers who were hopeful of a physically backed ETF, but regulated like a normal exchange-traded fund under a 1933 law.