An Exchange Traded Instrument (ETI) is an asset-backed security, the value of which (and the related performance) is linked to the underlying Assets collateralised in a segregated cell.
ETI’s are used to repackage the value of a Special Investment Vehicle (SIV) into an EU Transferable Security.
ETI’s therefore offer a comprehensive solution to investors willing to optimize their systematic risk and take exposure in alternative investment classes, like cryptocurrencies.
Benefits of ETI
The underlying Special Investment Vehicles (SIV) have no restrictions on asset classes and can be unregulated, like bitcoin.
UCITS eligibility: Even as the underlying asset, bitcoin itself doesn’t qualify for UCITS investments.
Non leverage: ETI is a “pass through” instrument that delivers the delta one performance of the underlying SIV.
EU passport: Products listed at the Gibraltar Stock Exchange, can be sold in all 31 EEA countries as well as in Switzerland.
Liquidity: ETIs issued on a stock exchange can be purchased by suitable investors through their normal/standard broker relationships so that the trade and settlement process is transparent and simple for all parties.
Security: ETIs issued by a securitisation special purpose vehicle (SCC) under Regulation (EC) No 40/2013 and 24/2009/ECB are not AIFs and are regulated by the Securitisation Act in the country of the issuer (Malta). The Securitisation Act sets out the conditions imposed on the issuer and any service provider and offers full investor protection against the credit risk of both the issuer and the management company.
ETIs are backed by and linked to performance linked bond units issued by a Special Investment Vehicle (SIV) managed by authorised asset managers.