On 16 December 2024, the United Kingdom Financial Conduct Authority (UK FCA) released Discussion Paper DP24/4, presenting proposals to enhance transparency, market integrity, and consumer protection in the UK’s crypto markets. These rules, if approved would apply to cryptoasset trading platforms, intermediaries, issuers, and other market participants operating in or targeting the UK market. The document invites industry feedback on plans to introduce admissions and disclosures (A&D) requirements for cryptoassets and implement a robust Market Abuse Regime for Cryptoassets (MARC). The UK FCA’s discussion paper outlines measures to establish regulatory controls for cryptoasset admissions, disclosures, and market abuse prevention. It builds upon the UK government’s earlier consultation in February 2023, which laid the foundation for including cryptoasset activities within the FCA’s regulatory remit. The proposals certain areas for regulation, such as the admissions and disclosures regime (A&D) for cryptoassets entering trading platforms and a comprehensive Market Abuse Regime for Cryptoassets (MARC). Together, these measures aim to reduce financial crime, protect consumers, and ensure crypto markets operate transparently and fairly.
The proposed Admissions and Disclosures (A&D) Regime introduces stricter controls for cryptoassets admitted to trading on authorised cryptoasset trading platforms (CATPs). The proposals sought to mandate firms to produce comprehensive admission documents containing clear, accurate, and detailed information about a cryptoasset. These documents will include disclosures on key risks, technological specifications, and governance mechanisms to help consumers make informed decisions. Platforms will also be tasked with conducting due diligence on issuers and their cryptoassets, ensuring the information disclosed meets established standards.
Trading platforms will need to assess the risks of each cryptoasset and reject those that could result in significant consumer harm. To further promote transparency, platforms must publish their admission and rejection standards, providing investors with insights into the criteria used to assess new listings. Admission documents must be filed on the UK FCA’s National Storage Mechanism (NSM) in a machine-readable format, such as XML or iXBRL, to improve accessibility and facilitate analysis.
The proposed Market Abuse Regime for Cryptoassets (MARC) introduces rules prohibiting insider dealing, market manipulation, and the unlawful disclosure of inside information, practices that are prevalent in unregulated crypto markets. Modelled on the existing UK Market Abuse Regulation (UK MAR), MARC seeks to mitigate risks such as fraudulent schemes, price manipulation, and unfair trading practices. Under these rules, issuers of cryptoassets will be responsible for disclosing inside information promptly and publicly.
For cryptoassets without an identifiable issuer, such as decentralised assets like Bitcoin, the responsibility for disclosure will fall to the trading platform or entity seeking admission. Platforms will also be encouraged to share information on suspected market abuse across markets, helping prevent fraud and manipulative activities. CATPs and intermediaries will be required to implement robust systems and controls to monitor trading activity and safeguard sensitive information.
These proposals form part of the UK government’s broader plan to bring cryptoasset activities into the regulatory perimeter, as announced earlier in 2024. Moving away from a phased implementation, the government has committed to regulating all major cryptoasset activities simultaneously, including trading, custody, and stablecoins. The UK FCA’s proposals are aimed to align with international standards set by organisations like the International Organization of Securities Commissions (IOSCO) and the Financial Stability Board (FSB), ensuring consistency with global best practices.
The feedback period for DP24/4 will close on 14 March 2025. The UK FCA will then assess the responses before proceeding with a formal consultation on detailed rules. Firms and stakeholders are encouraged to share their views via the UK FCA’s official channels.
