The UK’s Financial Conduct Authority (FCA) has unveiled an updated strategy to further support tokenisation in asset management, setting out new proposals that will allow UK funds to issue digital tokens and enable direct-to-fund dealings.
In a statement, the regulator says these measures are designed to “drive innovation and growth in asset management”.
Under the proposals, the FCA would permit authorised funds to create tokenised versions of their shares using distributed ledger technology (DLT). The plans also include a new alternative dealing model for fund managers to process buying and selling of tokenised and traditional units in authorised funds.
The regulator states that this effort is part of “a roadmap to advance fund tokenisation and address key barriers like using public blockchains and settling transactions entirely on the blockchain”.
Tokenisation, the FCA states, “has the potential to broaden access to private markets and infrastructure investment and ultimately help consumers access more cost-effective and personalised investments”.
A consultation paper published by the FCA on 14 October outlines how these proposals could apply specifically to authorised funds, though also notes the potential broader application of tokenisation across the UK fund and asset management industry. The consultation is set to run until 21 November, with the FCA planning to publish final rules in H1 2026.
Simon Walls, executive director of markets at the FCA, comments: “Tokenisation has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers.”
“There are many things that firms can do under our existing rules and more that become possible with the changes we propose enacting now,” Walls continues. “We stand ready to design the next stage with the industry – this publication suggests a path.”
The regulator also previously announced this month a new collaboration with London-based fintech Raidiam to commence open finance testing under its Smart Data Accelerator, which launched in September.
Source: https://www.fintechfutures.com/
