Crypto ETN: amendment of the AMF doctrine on the marketing of complex financial products

The French Financial Markets Authority (Autorité des marchés financiers, “AMF”) is amending its positions 2010-05 and 2013-12 to clarify the cases in which certain financial instruments indexed to crypto-assets are no longer considered complex due to the unusual nature of their underlying assets for non-professional clients. Under the conditions set out in the regulations and these positions, these products may be marketed in France to non-professional investors (i) without the risk of misapprehension of the risks and misunderstanding of the instrument linked to the nature of the underlying asset and (ii) in the absence of a guarantee of the formula and/or capital by a regulated institution.

Taking into account the introduction of a European framework for the crypto-asset market (EU Regulation 2023/1114 – MiCA) and the development of structured products indexed to crypto-assets in the European Union, the AMF is amending its doctrine to clarify the conditions under which these instruments may be offered to non- professional investors (i) without the risk of misunderstanding the risks and the financial instrument linked to the nature of the underlying asset and (ii) in the absence of a guarantee of the formula and/or capital by a regulated institution.

These conditions relate in particular to the following elements:

• the nature of the underlying crypto-assets, namely Bitcoin, Ether, and other crypto-assets that meet requirements in terms of capitalisation, average trading volume, and the regulated nature (within the meaning of MiCA) of the platforms on which these crypto-assets can be traded. Complex products indexed to crypto-asset indices may also meet this criterion in certain cases;
• the absence of leverage or discretionary components;
• the terms and conditions for structuring exposure to crypto-assets (physical or synthetic);
• in the cse of physical holding, the regulatory status of the provider responsible for the custody of the underlying crypto-assets and the explicit legal allocation of the underlying crypto-assets for the exclusive benefit of the holders.

The use of staking is expressly authorised provided that it does not compromise compliance with the above conditions and the requirement for asset segregation and the absence of effective dispossession.

The AMF plans to review this adaptation of its doctrine in the first half of 2027.

Gide’s team has been particularly involved in this work as chair of the Paris Europlace working group on Crypto ETNs. Led by its Gide 255 team dedicated to regulatory issues for Fintech and innovation, this working group brings together many players in the market interested in the subject and has benefited in particular from all of Gide’s expertise in these areas, particularly in financial services, capital markets, insurance law and taxation. The working group actively contributed to the AMF’s deliberations on the modification of its doctrine.