Regulatory framework

Base Prospectus and Final Terms

Virtune’s crypto exchange-traded products (ETPs) are regulated by the EU Prospectus Regulation. The Swedish Financial Supervisory Authority (Finansinspektionen) is the competent authority in Sweden responsible for approving these base prospectuses. An approved prospectus allows Virtune, as the issuer, to offer ETPs to the public in Sweden and/or admit securities to trading on a regulated market or a multilateral trading facility in Sweden. Through notification to Finansinspektionen, Virtune has passported the base prospectus for use in each of the EU Member States and Norway.

Virtune’s ETPs will be issued under the framework of the base prospectus, which needs to be renewed annually. The ETPs will be issued in series (each referred to as a Series). Each Series will be governed by the General Terms and Conditions specified in the Base Prospectus (the General Terms and Conditions), supplemented and/or amended by the applicable Final Terms relevant to such Series. In case of discrepancies between the General Terms and Conditions and the Final Terms, the Final Terms shall prevail.

The Base Prospectus and Final Terms contain important information about, among other things, the issuer, the ETPs, and the risks associated with investing in the ETPs. You can find Virtune’s latest base prospectus and final terms on each product page. Key information documents for each of Virtune’s ETPs are also available on Virtune’s website.

Virtune’s ETPs fall under the EU regulation for financial services concerning financial instruments, MiFID II, which aims to increase transparency in the trading of financial instruments and enhance investor protection. This directive governs all financial service providers in the value chain involved in the distribution of Virtune’s ETPs and imposes requirements that primarily ensure the following:

1. Trading is conducted on organized and appropriately regulated trading venues.

   
   

2. Market operators and investment firms operating a trading venue must make information, such as buy and sell bids and their respective volumes, publicly available both before and after trading.

   
   

3. Transparency regarding costs within the instruments and for services related to trading these instruments.

   
   

4. Investor protection: MiFID II limits incentives paid by third parties to investment firms or financial advisors for indirect access to their clients.

   
   

5. Extended reporting requirements to supervisory authorities: Investment firms must provide supervisory authorities with reports containing information about each transaction they execute by the following day.

   
   

Marketplace Regulations
Nasdaq Stockholm and Nasdaq Helsinki
Virtune’s ETPs are listed on Nasdaq Stockholm's trading venue and are therefore subject to its regulations for issuers of ETNs (Exchange Traded Notes, a type of Exchange Traded Product) as well as its additional regulations for ETNs with crypto assets as underlying assets. The Nasdaq Stockholm regulations for issuers of ETNs are outlined in the Nasdaq Stockholm Main Market Rulebook for Issuers of Exchange Traded Notes and primarily cover the following:

• Requirements to become an approved issuer on Nasdaq Stockholm, which is the fundamental criterion for listing ETNs on their trading venue. The following summarizes the key requirements: 

  
  

  • Capacity and competence: 

    
    

    • Ability to meet the standards for financial reporting and investor relations management in line with regulatory information requirements for both the company and its instruments.

      
      

  • Transparency and disclosure requirements: 

    
    

    • Financial reports: 

      
      

      • Semi-annual reports must be published within two months of the end of the reporting period.

        
        

      • Annual reports, including audit statements, must be published within four months of the end of the financial year.

        
        

    • Company website: 

      
      

      • Press releases from the past five years must be available on the company’s website.

        
        

      • Legal documents related to the company’s ETPs, such as information brochures, key information documents, prospectuses, or final terms, must be accessible on the website.

        
        

      • Net Asset Value (NAV) and reference prices must also be published on the company’s website.

        
        

ETNs with underlying assets consisting of one or more crypto assets are also subject to Nasdaq’s regulations for crypto assets: Nasdaq Nordic Guidance on the Requirements for Products Referencing Crypto Assets.

This regulation outlines the requirements for an ETP backed by underlying assets in the form of crypto assets to be approved and listed for trading on Nasdaq Stockholm. The essential requirements regarding the underlying collateral are as follows:

1. The outstanding amount of the financial instruments must be fully backed by collateral. The collateral must correlate with the underlying crypto asset. Full collateralization is considered achieved if the underlying asset is purchased on a 1:1 basis.

   
   

2. The issuer must continuously provide information on its website about the collateralization methodology. This must include details about the collateral deposited with which custodian, the procedures used for managing the collateral, and information on how the collateral is secured.

   
   

3. The underlying crypto assets for the issuer’s financial instruments must be stored with a Nasdaq-approved custodian. As of January 15, 2025, the following custodians are approved by Nasdaq (Virtune uses Coinbase as the custodian for all its ETPs as of January 15, 2025):
   a. BitGo
   b. Coinbase
   c. Fidelity
   d. Gemini
   e. Komainu
   f. Zodia

   
   

4. The maximum leverage for the financial instruments must not exceed a multiple of 1.

   
   

5. If the underlying asset is a crypto asset or a basket of individual crypto assets not constituting an index, it must be one, or a combination, of the crypto assets included in the Nasdaq Crypto Index (NCI). The NCI framework can be found here.

   
   

6. If the underlying asset is a crypto asset index, the index must be reliable and publicly available. This typically means the index must be administered by a benchmark administrator in compliance with Regulation (EU) 2016/1011 or the IOSCO Principles for Financial Benchmarks. Vinter (Invierno AB) is Virtune’s index administrator for the company’s index ETPs as of January 15, 2025.

   
   

Parts of Virtune’s ETP portfolio are cross-listed on Nasdaq Helsinki, where similar regulations apply to issuers of ETNs and ETPs with underlying crypto assets. Their frameworks include the following:

• Nasdaq Helsinki Regulated Market Rulebook for Issuers of Exchange Traded Notes

  
  

• Nasdaq Nordic Guidance on the Requirements for Products Referencing Crypto Assets

  
  

Nasdaq Stockholm and Nasdaq Helsinki
Nasdaq Stockholm and Nasdaq Helsinki require the issuer to submit an independent auditor's report annually, certifying that the company meets the requirements concerning the underlying assets as collateral.

Euronext Paris and Euronext Amsterdam
Parts of Virtune’s ETP portfolio are cross-listed on Euronext Paris and Euronext Amsterdam, and these ETPs are subject to the following regulations:

• Rulebook Euronext: This rulebook governs the requirements for becoming an issuer on the trading venue and the ongoing listing requirements for the instrument. It also regulates the issuer’s responsibilities for investor relations. Issuers must adhere to the principle of equal treatment of holders of the company’s instruments. This means they are responsible for publishing periodic financial information (including annual and semi-annual reports), audited where applicable, on time and in accordance with EU legislation or national regulations. The requirements also mandate issuers to communicate any information that (i) may affect the fair, orderly, and efficient functioning of the markets operated by the relevant Euronext Market Undertaking, or (ii) may alter the price of its instruments, while ensuring such information is disclosed publicly.
  Euronext only approves ETPs with underlying crypto assets included in their crypto framework. You can find the framework here.

  
  

Deutsche Börse Xetra
Parts of Virtune’s ETP portfolio may be cross-listed on Xetra. Xetra does not have specific regulations for issuers but only approves ETPs with underlying crypto assets included in their crypto framework. You can find the framework here.

Swedish Financial Supervisory Authority (Finansinspektionen)
Virtune AB (Publ) is regulated by the following laws:

• The Anti-Money Laundering Act (2017:630)

  
  

• The Currency Exchange and Other Financial Operations Act (1996:1006)

  
  

Virtune AB is currently registered as a financial institute with the Swedish Financial Supervisory Authority (Finansinspektionen).
Click here to download the registration approval.

The purpose of the Anti-Money Laundering Act is to prevent financial activities from being used for money laundering and terrorist financing. Virtune’s partners are required to undergo a customer due diligence process before a business relationship can begin. This process is subsequently conducted annually. It ensures that Virtune has a thorough understanding of its counterparties and their activities to mitigate and prevent misuse of the business for money laundering or terrorist financing.

The company reviews every cross-border transaction between Virtune and its partners. In the case of high-risk transactions, the company is responsible for reporting these to Finansinspektionen. Virtune submits the following reports to Finansinspektionen annually:

• Anti-Money Laundering Report

  
  

• Ownership Reporting concerning Virtune’s owners

  
  

In the event of changes to the management or board of directors, new members must be evaluated and subsequently approved by Finansinspektionen in accordance with its requirements for management assessment. All current members of the management team and board of directors have undergone this assessment and have been approved by Finansinspektionen.