Key Takeaways
- • The FCA published Policy Statement PS26/7 in April 2026, clearing the regulatory path for authorized asset managers to operate tokenized funds within existing rulebooks rather than requiring separate experimental structures or regulatory waivers.
- • Onchain transaction records can now serve as primary books of account for unit dealings without requiring duplicate off-chain records, provided firms maintain appropriate resiliency plans—a significant operational simplification for blockchain-based fund infrastructure.
- • The UK asset management sector manages £16.5 trillion in assets under management, and the FCA's fund tokenization framework is designed to unlock efficiency gains while maintaining existing investor protection standards.
- • The guidance supports a "direct dealing model" and the industry "Blueprint" model for tokenized registers, giving firms practical clarity on how distributed ledger technology can integrate into regulated fund operations without altering core investor safeguards.
- • The approval reflects a broader FCA digital assets roadmap outlined in January 2025 and signals institutional-grade confidence in blockchain-enabled fund operations as a modernization pathway for UK market infrastructure.
Summary
The Financial Conduct Authority has published comprehensive guidance and new rules enabling authorized asset managers to operate tokenized funds within the UK's existing regulatory framework. The April 2026 Policy Statement PS26/7 represents a material shift away from requiring firms to seek individual modifications or waivers for blockchain-based fund operations, instead embedding tokenization into standard compliance pathways. This approach reflects the FCA's stated commitment to support innovation in the UK asset management sector while maintaining investor protection frameworks.
The core regulatory permission centers on the treatment of onchain records. The FCA confirmed that distributed ledger technology transaction records can serve as primary books of account for fund unit dealings, eliminating the requirement for duplicate off-chain record-keeping provided firms implement appropriate resiliency plans. This operational simplification addresses a critical friction point for asset managers evaluating blockchain infrastructure. The guidance also validates the industry "Blueprint" model for tokenized registers and establishes a direct dealing model for fund unit transactions on distributed ledgers.
The UK asset management sector, which manages £16.5 trillion in assets under management globally, stands to benefit from these efficiency improvements. According to the FCA statement, tokenization and DLT have potential to make fund management more efficient, help firms meet evolving consumer needs, and open new distribution routes to investors. Simon Walls, the FCA's executive director of markets, emphasized that the regulator had delivered a practical framework giving firms confidence in how fund tokenization can operate within the FCA's existing risk controls.
The approval positions the UK as a developed regulatory jurisdiction for digital asset infrastructure at the institutional level. The FCA's framework sits within a broader digital assets roadmap first articulated in a January 2025 letter to the prime minister and represents a foundational modernization step for UK market infrastructure. By integrating tokenized fund operations into existing rules rather than creating parallel regulatory regimes, the guidance signals institutional-grade confidence in blockchain technology's operational readiness for regulated asset management at scale.
The core regulatory permission centers on the treatment of onchain records. The FCA confirmed that distributed ledger technology transaction records can serve as primary books of account for fund unit dealings, eliminating the requirement for duplicate off-chain record-keeping provided firms implement appropriate resiliency plans. This operational simplification addresses a critical friction point for asset managers evaluating blockchain infrastructure. The guidance also validates the industry "Blueprint" model for tokenized registers and establishes a direct dealing model for fund unit transactions on distributed ledgers.
The UK asset management sector, which manages £16.5 trillion in assets under management globally, stands to benefit from these efficiency improvements. According to the FCA statement, tokenization and DLT have potential to make fund management more efficient, help firms meet evolving consumer needs, and open new distribution routes to investors. Simon Walls, the FCA's executive director of markets, emphasized that the regulator had delivered a practical framework giving firms confidence in how fund tokenization can operate within the FCA's existing risk controls.
The approval positions the UK as a developed regulatory jurisdiction for digital asset infrastructure at the institutional level. The FCA's framework sits within a broader digital assets roadmap first articulated in a January 2025 letter to the prime minister and represents a foundational modernization step for UK market infrastructure. By integrating tokenized fund operations into existing rules rather than creating parallel regulatory regimes, the guidance signals institutional-grade confidence in blockchain technology's operational readiness for regulated asset management at scale.
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