ESMA would be seeking investors’ opinions on the possibility of integrating digital assets into European investment funds: the details.
The European Securities and Markets Authority (ESMA) has requested input from investors to assess the possibility of introducing digital assets into UCITS (Undertakings for Collective Investment in Transferable Securities) investment funds. The aim of the initiative is to gather information from stakeholders to evaluate the potential risks and benefits of UCITS funds exposure to various asset classes. ESMA is also considering including structured loans, emission concessions, commodities, and unlisted stocks.
What are UCITS funds?
UCITS funds are European investment funds aimed at protecting and ensuring investor safety. These funds represent an overall market of over €12 trillion, potentially larger than that of Bitcoin ETFs in the United States. They are the primary retail investment product in the EU, accounting for approximately 75% of all collective investments made by retail investors. Non-European investors can also purchase UCITS funds. Regulated by EU regulations, UCITS currently consist only of traditional stocks and bonds.
Stakeholders involved by ESMA have until August 7th to provide their feedback. If the European Union’s financial regulator were to approve this proposal, it would not create a standalone investment fund entirely composed of digital assets like Bitcoin. Instead, multiple investment funds would be created that include varying percentages of digital assets, based on investors’ risk preferences.
