The firm that provides Bitcoin index services to Chicago Mercantile Exchange (CME) CF Benchmarks has been awarded a crypto index provider license by U.K.’s Financial Conduct Authority (FCA). This makes CF Benchmarks the first firm to be authorized as a benchmark administrator in line with the European Benchmarks Regulation (EU BMR).
On Friday the UK’s FCA granted CF Benchmarks to be an administrator which means that financial companies can commence utilizing CF’s indices for any financial product being offered across the European market once the BMR comes into effect in 2020.
CF Benchmark’s CEO Sui Chung expressed gratitude after receiving the license, saying it was a major victory for crypto companies based in the EU zone. He explained that the use and provision of indices are highly regulated in EU and firms using such benchmark must ensure it originates from a regulated benchmark provider.
Chung stated that the regulatory scope for benchmarks within the EU zone for financial-based companies is very broad saying that banks, as well as asset managers, utilize the indices on various aspects. For instance, a fund manager wishing to give an exchange-traded fund (ETF) which tracks an index is required to track a licensed index.
Chung explained that the financial industry can now have access to regulated benchmarks from a highly competent team that will help in enhancing innovation as well as the adoption of virtual assets across the European Union. Speaking to Finance Magnates, Chung also stated that reliable, as well as trusted indices, are important for the development of the crypto market since they will help in bringing in more investors, both individuals, and institutions, to the market.
According to CoinDesk as the crypto industry becomes more popular, crypto indices are also becoming more important, especially from the traditional financial houses and other indices providers are likely to get the nod in the EU zone in the near future.
CF Benchmark was previously referred to as Crypto Facilities and is the current index provider of CME CF Bitcoin Reference rate. The firm was purchased at an undisclosed figure by a major US crypto exchange firm Kraken at the start of the year.