UK FCA approves onchain fund registers and direct-to-fund dealing in tokenisation push

The Financial Conduct Authority finalised rules on Thursday allowing UK asset managers to maintain official investor registers on blockchain and introduced an optional Direct-to-Fund dealing model that removes intermediaries from fund transactions.

The changes, set out in policy statement PS26/7, take effect immediately. They apply to about 2,600 firms managing an estimated £16.5 trillion in assets across the UK market.

The policy formalises a framework the regulator has tested since January 2025, when it authorised the UK’s first tokenised UCITS fund under the industry “Blueprint” model. PS26/7 turns that pilot into permanent rules.

Onchain records gain regulatory recognition

Under the new rules, authorised fund managers can use distributed ledger technology (DLT) as the official register of investor ownership.

A full off-chain duplicate is no longer required, provided firms maintain operational resilience and comply with governance, data protection, and financial crime standards.

The framework builds on an industry “Blueprint” model already used to approve the UK’s first tokenised UCITS fund.

Funds may operate on public or private blockchains, including across multiple networks, as long as investor rights and fee structures remain unchanged.

Simon Walls, the FCA’s executive director of markets, said tokenisation would “play an important role in asset management” and that the regulator had delivered “a practical framework to give firms confidence in how fund tokenisation can operate within the FCA’s rules.”

Direct-to-fund dealing reduces intermediaries

The FCA also introduced an optional Direct-to-Fund (D2F) dealing model.

Under D2F, the fund or its depositary becomes the counterparty to investor transactions. This removes the need for an asset manager or intermediary between the investor and the fund.

Transactions are executed in a single step, with units issued or cancelled as cash moves directly between investor and fund. The regulator said the structure could reduce operational friction and better align with faster settlement systems, including blockchain-based infrastructure.

Firms will still be able to use traditional dealing models or combine both approaches within umbrella fund structures.

Three-stage roadmap signals what comes next

PS26/7 sits at stage one of a broader FCA digital assets path. Stage two extends to traditional securities moved on-chain. Stage three involves tokenised cash flows enabling portfolio management through wallets and smart contracts. The regulator said it may explore settlement using digital cash and stablecoins in consultations later in 2026.

The framework sits alongside the broader cryptoasset regime. As Cryptopolitan reported, the FCA’s CP26/4 consultation proposes Consumer Duty rules, safeguarding requirements for client cryptoassets, and stricter governance for large stablecoin issuers. That regime takes effect in October 2027.

The industry has been signalling this shift for months

Bitwise chief investment officer Matt Hougan and head of research Ryan Rasmussen wrote in a July client note that “tokenisation, the shift to issuing stocks, bonds, and other real-world assets on blockchains instead of traditional rails, is having a moment.”

The global stocks and bonds market is worth roughly $257 trillion combined, against current tokenised real-world assets at about $25 billion.

Robinhood chief executive Vlad Tenev offered a sharper version at Token2049 in October. “Tokenisation is like a freight train. It can’t be stopped, and eventually it’s going to eat the entire financial system,” he told the conference, predicting most major markets will have tokenisation frameworks within five years.

The first tokenised UCITS launched 16 months ago. The framework that authorised it is now permanent.

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