UK regulator clears path for tokenized funds within existing rules
The FCA signs off rules to let UK funds keep registers onchain and add a new Direct‑to‑Fund dealing model, aiming to simplify tokenized funds inside the existing regime.
The UK's Financial Conduct Authority (FCA) has approved new regulations that will allow investment funds to maintain their registers on blockchain networks and implement a Direct-to-Fund dealing model. The regulatory framework enables tokenized funds to operate within the country's existing financial rules, removing previous barriers that prevented traditional funds from adopting blockchain-based record-keeping systems.
The move represents a significant shift in the UK's approach to digital asset integration within established financial structures. Previously, fund managers faced regulatory uncertainty when attempting to tokenize their offerings or move administrative functions onto distributed ledger technology. The FCA's decision aims to provide clarity while maintaining investor protections that exist under current fund regulations.
Industry observers expect the regulatory approval to accelerate adoption of tokenized investment products in the UK market. The new framework could reduce operational costs for fund managers while potentially improving settlement times and transparency for investors. Several major asset management firms have been exploring tokenization strategies, and the regulatory clarity may prompt increased investment in blockchain-based fund infrastructure.
Market participants will be watching for the first funds to implement the new on-chain register system and Direct-to-Fund dealing model. The success of early adopters could influence similar regulatory approaches in other major financial centers, potentially positioning the UK as a leader in tokenized finance regulation.
Source: Cointelegraph
