The appeal of ETP Operating Model 

The concept of a digital asset ETP might appear counterintuitive to those immersed in the digital asset space, as it introduces intermediaries that the technology itself aims to eliminate. Nevertheless, by adopting the well-established and regulated framework of investment products, ETPs present an avenue to expose digital assets to a significantly broader investor base. This expansion is particularly vital for individuals who, due to various reasons, might face challenges accessing the digital asset class directly. For example, retail investors may lack the necessary tools, time, risk tolerance, and technical know-how for direct digital asset investments. The conventional securities structure of ETPs also extends accessibility to institutional investors, whether constrained to these types of instruments or desiring to avoid direct ownership of digital assets for reasons such as regulatory compliance, technical considerations, or other factors.

Digital asset ETPs are organized as debt securities. The initiation of an ETP involves the issuer, typically an investment company or trust, drafting a prospectus document for regulatory approval. Once approved by the regulatory authority and after securing the necessary service providers, the issuer proceeds to apply for listings on desired stock exchanges. The eligibility criteria for listing, including the types of products (e.g., asset-backed or futures) and underlyings (e.g., digital assets), vary among exchanges. The operational model and selection of service providers can differ based on the product type, jurisdiction, and the issuer’s program design.

In the case of physical digital asset ETPs, they function as secured debt obligations, fully supported by holdings of the underlying digital asset y they mirror. These digital asset assets are physically acquired and held by independent third-party custodians, overseen and controlled by a designated trustee. The trustee assumes responsibility for managing the rights and entitlements on behalf of ETP holders and coordinating redemptions in the event of issuer insolvency.

On the other hand, synthetic ETPs operate as unsecured debt obligations, meaning the issuer isn’t obligated to hold the underlying assets tracked by the product. Instead, derivatives and swaps are employed to replicate performance (specific structure and terms may vary). Consequently, synthetic ETPs carry higher counterparty risk, as there is no legal mandate for the products to be fully backed by the underlying physical asset in a 1-to-1 ratio.

 In general, the majority of digital asset ETPs available in the market are physical products, driven by the preference of many investors for the transparency and diminished counterparty risk offered by this particular structure.

  • On the primary market, the Issuer exchanges shares of the product with the authorised participant (“APs”) in return for either the underlying digital assets (“in-kind”) or the cash equivalent, with underlying digital assets delivered to and from the designated custodians as required. Depending on the structure, a transfer agent and trustee may be involved in liquidating the collateral and transferring funds.
  • As the APs manage primary market creation and redemption, market makers provide liquidity in the secondary market, ensuring continuous, efficient trading.
  • Investors buy and sell the products on the secondary market, typically placing their orders via their bank or broker, who in turn execute their orders on the relevant stock exchange, either directly or via other intermediaries.

The technical issuance will be operated by the Swiss team of Apex Group, covering all regulatory, reporting and administration requirements, necessary for the ETP Products to be admitted to trading on major Swiss and European stock exchanges.

A white-label platform, such as AG, empowers asset managers to establish an ETP without the need to construct their ETP business from the ground up. By furnishing the comprehensive regulatory, technological, and distribution infrastructure required for fund market entry, these platforms streamline the ETP launch process, making it quicker, more cost-efficient, and simpler. Moreover, they allow asset managers to maintain their brand identity and investment expertise. Nearly any type of asset manager—be it indexed, systematic, or active—can leverage a white-label ETP platform to introduce their investment IP and bring a product to market. However, it’s important to acknowledge that not all white-label platforms offer the same range of services.






Our turn-key solution is particularly well suited for regulated financial institutions :

Off-balance sheet treatment of issued products

Non consolidated treatment of the Issuer vehicle for the Sponsor of the Product, under most reporting standards (including SAB 121, SEC).

The issuance vehicle is a Swiss limited liability company, wholly owned by a standalone Swiss charitable shareholder, under supervision of Swiss federal authorities.

We are the only option in the market to issue off-balance sheet digital asset backed ETPs, which is a requirement under the new US impairment rules published last year by the SEC.

Flexibile Selection of counterparties

Tailorable execution platform for authorized participants and index providers.

The issuance vehicle is a Swiss limited liability company, wholly owned by a standalone Swiss charitable shareholder, under supervision of Swiss federal authorities.

We are the only option in the market to issue off-balance sheet digital asset backed ETPs, which is a requirement under the new US impairment rules published last year by the SEC.

Choice of multiple custodians

Client acting as Product Sponsor/Asset Manager is free to make a selection of a custodian institution which will then be engaged by the issuance vehicle and onboarded with the custodian.

Within the engagement of the custodian, the Client will directly discuss the terms of such engagement, preferred reporting tools and obtain viewing access to the custodian wallets/accounts controlled by the issuance vehicle and pledged in favor of the ETP noteholders.

The clients may choose to work with “ a default” custodian already onboarded with the issuance vehicle or open a new custodian engagement exclusive for their products only

Tailored setup for active trading/rebalancing products

Rebalancing / active trading of the underlying components can be done by Client / Product Sponsor

The rebalancing trades for ETP products tracking an index or basket of underlying components, based on index or actively managed ETPs, are done by Clients or under their control and instructions, as Product Sponsors.

Quick time to market and efficient costs

Available documentation and legal framework for quick time to market

Drafting product documentation, legal framework and getting approvals from authorities is generally the most daunting and longest tasks in launching a new ETP program, with timeframes anywhere between 9-24 months and high legal costs (approx. CHF 200,000).

Our turn-key solution offers the additional benefits of working with available standard documentation and flexible legal framework for quickest time to market for Clients (between 3-6 months, with setup fees of around CHF 50K per ISIN).

Privately placed products ensure succesfull Public Listing

Private Placement before Listing for “smooth” launch

One of the most critical moments in the launch of ETP Product on the market is the “seed” funding.

A “weak” seed funding may hinder larger institutions investing because of risk policies prohibiting becoming a majority investor (usually, around 10% threshold ).

NAV Reporting to exchanges/investors

Reporting to market and exchanges

We take care of all necessary investor reporting, fee calculations and NAV, etc and its dissemination to all major financial market data bases, including:

factsheets, PRIIP KIDs and MiFID2 Product Metadata in Switzerland and EU for optimum distribution.

Fully collateralised products

Fully collateralised

ETPs are fully collateralised at all times to mitigate the issuer risk.

We maintain the highest security standards through segregation of portfolios, full collateralisation and oversight by an independent third party security agent.

Highly regulated products

Highly regulated

All ETPs have a public prospectus, are exchange approved and fully documented

ESG compliant ETP products

ESG capabilities

Apex offers extensive ESG reporting and scoring capability for ESG compliant Product issuance.