Norton Rose Fulbright advises 3iQ on listed crypto ETFs in Australia

Global law firm Norton Rose Fulbright has assisted 3iQ in listing two ETFs on the Cboe Australia exchange, the 3iQ CoinShares Bitcoin Feeder ETF and the 3iQ CoinShares Ether Feeder ETF (Funds).  

The Funds are some of the first ETFs in Australia that invest solely in an underlying listed fund that invests directly in crypto products. There has been growing institutional and retail interest in crypto products, particularly Bitcoin and Ethereum over the last few years and 3iQ’s funds allow investors to gain exposure to bitcoin or ether in a regulated environment and at a lower cost than investing directly in them.

Norton Rose Fulbright equity capital markets partners Jeremy Wickens and Jon Ireland commented: 

“This transaction was particularly significant for 3iQ as it continues to expand its presence to markets outside of Canada. We are delighted to achieve this outcome for our client, given the earlier uncertainty of the regulatory environment and others hurdles to list a crypto ETF in Australia.”

The Norton Rose Fulbright team’s role encompassed all aspects of the transaction, including preparing the PDSs, preparing the Cboe listing applications, advising on AFSL and marketing matters and website establishment, liaising with Cboe, ASX and ASIC and establishing the feeder funds and negotiating fund documentation including the constitution and investment management agreement.

Jeremy and Jon further commented:

“The transaction was complex as 3iQ had to work closely with ASIC, Cboe and its Australian advisors to ensure the funds operate in accordance with Australian financial services regulation and are in compliance with the updated Cboe Operating Rules in respect of eligible crypto-assets. With 3iQ and its other service providers, we are very pleased to have been able to address ASX Clear’s significant cash margin requirements for clearing participants who clear crypto products and the particular challenges for market makers in the crypto space.”

Jeremy and Jon co-led the team, supported by special counsel Peter Moh (corporate), senior consultant Stephen Etkind (investment funds) and associates Wilson Au (corporate), Ellen Laughton (corporate) and Merren Taylor (investment funds).

Both funds are ‘feeder funds’ in that they primarily invest in units of an underlying fund listed on the Toronto Stock Exchange (TSX). The Bitcoin Fund holds units in the 3iQ CoinShares Bitcoin ETF (TSX: BTCQ.U, BTCQ) while the Ether Fund holds units in the 3iQ CoinShares Ether ETF (TSX: ETHQ.U, ETHQ). 3iQ is the investment manager of the Funds and Perpetual is the responsible entity of the Funds.

Norton Rose Fulbright also recently advised Australian Ethical on the listing of its first ever actively managed ethical ETF.