The UK’s Financial Conduct Authority (FCA) has approved new rules that allow tokenized funds to operate fully within the existing authorized fund regime, rather than in separate experimental structures.
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The changes give asset managers a clearer route to keep fund registers on blockchain and to use an optional Direct‑to‑Fund (D2F) dealing model, while keeping current investor protection standards in place.
Onchain Fund Registers Under the Blueprint Model
In Policy Statement PS26/7, the FCA confirms that authorized funds can run their unitholder registers on distributed ledger technology using the industry “Blueprint” model.
Onchain transaction records may serve as the primary books and records for unit deals, and firms do not need a full off‑chain mirror if they maintain appropriate operational resilience plans.
The guidance applies to UCITS and other authorized funds and allows registers to sit on public DLT networks if firms meet the regulator’s expectations on governance, data privacy and financial crime controls. Units in a single share class can be recorded across multiple blockchains as long as investors’ rights and the structure of charges remain the same.
Direct-to-Fund Dealing Model to Support Tokenization
The main rule change is the introduction of the optional Direct‑to‑Fund dealing model, which alters how subscriptions and redemptions are processed. Under D2F, the fund or its depositary, rather than the asset manager, becomes the counterparty to investor trades, so units are issued or canceled directly against cash flows between investors and the fund in a single step.
The FCA says this should make operations more efficient and easier to align with onchain or shortened settlement cycles. Following industry feedback, the regulator will still allow managers to deal as principal in units of a fund using D2F and to combine different dealing models within an umbrella structure.
Looking ahead, the FCA outlines a roadmap from tokenized funds to tokenized assets and ultimately tokenized cash flows, including models where investors hold tokenized assets in digital wallets and managers use smart contracts to manage portfolios.
It also signals openness to waivers that would let funds use digital cash and stablecoins for settlement and certain expenses, ahead of a broader crypto asset and stablecoin regime due to take effect in October 2027.