According to a report from the Financial Times, Jupiter Asset Management’s compliance team prevented its investors from gaining exposure to a cryptocurrency exchange-traded product (ETP) within one of its Irish UCITS funds.
The decision to block the investment stemmed from concerns regarding “divergent regulatory approaches in the EU.”
UCITS, which are open-ended investment funds, are a popular investment vehicle, particularly among European retail investors. Presently, Ireland prohibits cryptocurrency investments in UCITS funds.
The disclosure of this incident coincides with European fund managers’ endeavors to include exposure to crypto assets in their funds. However, the “divergent regulations” across Europe have hindered their ability to do so.
Laurent Kssis, a crypto expert specializing in trading and ETFs at CEC Capital, explained to Cryptonews, “The Commissioner in Ireland has been very clear about crypto investment vehicles such as ETFs and ETPs; they do not recognize Bitcoin or crypto as qualified [asset class], hence why this stance persists today. We submitted our first ETP filing to them back in 2015 under section 110, and it was rejected.”
Jupiter is a UK-based fund management group that oversees equity and bond investments for both private and institutional investors, with assets under management totaling $66.5 billion.
At the time of press, a spokesperson from Jupiter Asset Management was not available to provide further comments on the Financial Times report.
According to a Jupiter spokesperson quoted in the publication, there was no regulatory intervention or impact on the fund. “The trade was executed, identified through our regular oversight process, and subsequently canceled,” the spokesperson added.
UK Investors Have Dabbled in Crypto
In 2021, Ruffer Investment Management, based in the U.K., disclosed a staggering $1.1 billion profit within a mere five months from its investment in Bitcoin.
The Guernsey-based closed-ended fund, Ruffer Investment Company, had some exposure to Bitcoin in 2020. At the time, a Ruffer investment director stated that the firm divested its Bitcoin holdings, anticipating reduced trading activity among younger demographics as lockdown measures were being lifted.
The European market boasts a wide range of cryptocurrency products. Key European crypto ETP providers include 21Shares, CoinShares, WisdomTree, VanEck, Valour, Invesco, Hashdex, and ETC Group.
In January 2021, the Financial Conduct Authority (FCA) in the UK imposed a ban on the sale of derivatives and ETPs related to cryptocurrencies. The FCA cited concerns over potential harm to retail consumers as the reason for the ban. However, institutional investors (excluding retail investors) still have access to crypto products through financial institutions such as Goldman Sachs, ICAP, JPMorgan, and UBS.
