Swiss Regulator Approves First Retail Fund That Holds Bitcoin Directly

In brief

• Switzerland's financial regulator FINMA announced Oct. 20 that it approved the country's first retail exchange-traded fund that invests directly in Bitcoin.
• The fund received an exemption from risk diversification rules, which FINMA justified by Bitcoin's long trading history and high trading volume.
• FINMA did not name the fund or its issuer, and said other providers have submitted or announced applications for Bitcoin ETFs.

The Swiss Financial Market Supervisory Authority, or FINMA, announced Tuesday that it approved the country's first retail fund that invests directly in Bitcoin.

It's an exchange-traded fund or ETF, so its shares trade on an exchange like any listed stock. Under Swiss law, FINMA classified it as an "other fund for alternative investments" with a specific risk.

FINMA waived the applicable risk diversification rules for the fund, citing Bitcoin's long trading history and particularly high trading volume compared with other cryptocurrencies.

“As Bitcoin has a long trading history and a particularly high trading volume compared with other cryptocurrencies, FINMA has approved an exemption from the applicable risk diversification rules in this case,” the regulator said.