05-06-2026 
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The United Kingdom’s top financial services regulator, the Financial Conduct Authority (FCA), has approved new rules and guidance allowing tokenized funds to operate within the country’s existing regulatory framework, with key changes including on‑chain fund registers and a new direct‑to‑fund dealing model.
- FCA approves new rules for tokenized funds
- FCA launches a direct-to-fund trading model
- Industry collaboration results in improved guidance
On April 30, the FCA said asset managers will now find it easier to unlock the benefits of fund tokenization, following the publication of its policy statement on ‘Progressing Fund Tokenization’, also known as ‘PS26/7’, which set out how firms can use distributed ledger technology (DLT) within the existing regulatory regime.
The move is part of a plan introduced by the regulator in its January 2025 letter to the Prime Minister, in which it committed to advancing a roadmap for digital assets within asset management to accelerate the adoption of tokenization and support the sector’s growth.
The U.K. is a leading asset management hub, with around 2,600 firms managing £16.5 trillion ($22.4 trillion) of assets for local and global clients. For this reason, supporting growth and innovation in the sector is a core part of the FCA’s five-year strategy to 2030.
“Tokenisation has the potential to play an important role in asset management, and its adoption will be driven by firms and investors,” said Simon Walls, executive director of markets at the FCA, in an April 30 press release. “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.”
‘Direct to Fund’ and ‘Blueprint’ model
One of the key features of the new guidance is an optional ‘Direct to Fund (D2F) model’, in which the fund or its depositary is the counterparty to investor trades, rather than the manager. This means deals go through a single step, in which units are issued or canceled directly against cash moving between investors and the fund.
“The new single-stage process would facilitate tokenisation, by removing the requirement for units to be issued to the fund manager before being transferred to unitholders, enabling atomic settlement on-chain for newly-issued units,” said the FCA, adding that it “enables investors to deal directly with the fund, whether traditional or tokenised.”
Another notable addition in the new guidance is support for firms seeking to launch tokenized authorized funds in the U.K. using the industry‑led ‘Blueprint’ model. The new guidance means that an on‑chain record of transactions may now be considered the primary books and records for unit deals, and that a firm doesn’t need to maintain a full ‘mirror’ off‑chain record of this information if it has “appropriate resiliency plans in place.”
The FCA said it had already authorized the first tokenized U.K. undertakings for a collective investment in transferable securities (UCITS) scheme under the Blueprint in January 2025.
The policy statement also set out how fund tokenization could develop over time as part of the FCA’s roadmap for digital assets, including work on a vision for how U.K. wholesale capital markets might adopt DLT and engaging with the industry on DLT in the U.K. wholesale markets.Beyond this, the regulator said it would explore how rule modifications or waivers could be introduced to allow authorized funds to use digital assets for non-investment purposes, such as settling unit transactions, paying distributions, and covering gas fees on DLT networks.
Industry collaboration
According to the FCA, it worked closely with the asset management industry to develop PS26/7, intending to support innovation and improve sector efficiency.
The newly announced guidance was thus warmly received by some industry contributors.
“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,” said John Allan, head of innovation and operations at the Investment Association (IA) and director of Engine, the IA’s fintech hub. “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.”
He added that, “this milestone represents a meaningful advance in the UK’s approach to innovating funds market infrastructure.”
The tokenized fund guidance comes as the FCA enters the final stage of its consultation on the U.K.’s future digital currency regulatory regime.
The regulator is now finalizing its rules, which are due to be published this summer, after which digital asset firms can start applying for authorization from September 30 onwards. The new regime is set to come into force on October 25, 2027, the date when the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 will officially bring new regulated activities for digital currencies under the jurisdiction of the FCA.
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