Asset managers will find it easier to
unlock the benefits of fund tokenisation, following the
publication of new guidance by the Financial Conduct Authority
(FCA). The guidance sets out how firms can use distributed ledger
technology (DLT) within the regulator's existing
rules.
New rules will also make fund dealing
more efficient, including an optional Direct to Fund (D2F) model.
This enables investors to deal directly with the fund, whether
traditional or tokenised.
Tokenisation is a way
of representing an asset, or ownership of an asset,
using distributed ledger technology. Tokenisation has
the potential to lower costs and open up investment
opportunities to a wider
audience.
The FCA has worked closely with
industry to develop this guidance and rules to support innovation
and improve efficiency for asset
managers.
Simon Walls, executive director of
markets at the FCA said:
“Tokenisation has the potential to
play an important role in asset management, and its adoption will
be driven by firms and investors. We have focused on delivering
what the market has asked for: a clear, practical framework that
provides confidence in how fund tokenisation can operate within
our rules, both now and into the
future.”
John
Allan, director, innovation and operations unit and director,
Engine at the Investment Association, said:
“This milestone represents a
meaningful advance in the UK's approach to innovating funds
market infrastructure. Working in collaboration with the
investment management industry, the FCA has produced detailed
guidance that provides confidence around
public‑chain models where the
right controls are in place, and the use of digital cash tools
for operational needs. Alongside wider work on wholesale digital
market infrastructure, this guidance and the increased
optionality provided by D2F gives firms a stronger foundation to
align innovation ambitions
with long‑term operating choices.”
The UK is a leading asset management
hub, with around 2,600 firms
managing £16.5 trillion of assets for UK and
global clients. Supporting growth and innovation in the
sector is a core part of the FCA's strategy.
The policy statement also sets out how
fund tokenisation could develop over time as part of the
FCA's roadmap for digital
assets.
Notes to
editors:
- If you would like an embargoed copy of the
Policy Statement, please contact brittany.noppe@fca.org.uk
-
In its letter to the Prime
Minister, the
FCA committed to progress a roadmap for digital
assets within asset management to accelerate the
adoption of tokenisation and support the
growth in the
sector.
-
The FCA will also be engaging with
industry on distributed ledger technology in UK wholesale
markets.
-
The FCA enables a fair and thriving
financial services market for the good of consumers and the
economy. Find out more about the FCA.
