FINMA permits a Swiss-law retail fund to concentrate on Bitcoin while keeping custody safeguards, risk disclosures and sales duties.

Swiss financial regulator FINMA has approved the first retail exchange-traded fund under Swiss law to invest directly in Bitcoin, granting a diversification exemption that allows concentrated exposure while keeping custody and sales safeguards.

In its Oct. 20 announcement, FINMA said Bitcoin’s long trading history and particularly high trading volume compared with other cryptocurrencies justified the exception. The fund falls into Switzerland’s category of other funds for alternative investments carrying particular risk.

The exemption allows this retail fund to concentrate on Bitcoin without meeting the applicable diversification requirements. FINMA described an exception for this case, giving the fund permission to hold concentrated exposure within that legal structure.

That structure distinguishes it from the exchange-traded products, or ETPs, familiar to Swiss investors. Swiss exchange SIX describes its ETPs as collateralized debt securities, rather than collective investment funds.

A fund investing directly in Bitcoin and a debt security linked to its performance are different legal arrangements, even when both offer Bitcoin exposure.

FINMA’s announcement did not name the fund’s issuer, disclose fees, or provide a trading start date. Approval alone does not establish when investors can trade the product or what it will cost.

The regulator also said other providers had submitted or announced Bitcoin ETF applications, but had not reported further approvals.

FINMA said supervised institutions must still reduce operational and custody risks, referring to its Jan. 12 custody guidance announcement .

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