The UK's FCA Releases Tokenization Fund Regulations, Allowing Open-Ended Funds to Issue Shares on Public Blockchain

BlockBeats News, May 1st, the UK Financial Conduct Authority (FCA) issued new regulations on tokenized funds, allowing funds to use blockchain and distributed ledger technology (DLT) for investor record-keeping and share management within the existing regulatory framework, promoting the digitization of the asset management industry.

According to the new rules, authorized funds can deploy the investor register on a public blockchain network in compliance with security and transparency requirements, and allow fund shares to be issued across multiple blockchains. The FCA also introduced the optional "Direct-to-Fund (D2F)" model, allowing funds or custodians to transact directly with investors to streamline on-chain settlement processes.

The FCA stated that the relevant rules have supported the approval of the first UK UCITS tokenized fund and will further explore the application of stablecoins, digital cash, and smart contracts in fund settlement. They plan to seek further opinions on the application of DLT in wholesale financial markets by 2026. The complete UK regulatory framework for crypto assets is expected to be in place by October 2027.