UK Financial Regulator Proposes 10% Crypto Allocation Cap for Retail Funds

The UK's Financial Conduct Authority (FCA) has taken steps to align its regulations with those of other countries by proposing a 10% cap on crypto allocations for certain authorized investment funds. The proposal would allow undertakings for collective investment in transferable securities (UCITS) and some non-UCITS funds to gain exposure to crypto.

The FCA's goal is to keep retail-focused funds contemporary and consistent with investor demands, while maintaining consumer protection and market stability. The regulator believes that significant exposure to crypto products would not be suitable for these funds due to the speculative nature of underlying assets.