Global: FCA Unveils Roadmap to Support Tokenisation of Investment Funds

The UK’s Financial Conduct Authority (FCA) has outlined a strategic roadmap to advance the tokenisation of investment funds, positioning the initiative as a key driver of innovation, efficiency, and competitiveness within the nation’s £14 trillion asset management industry.

With more than 2,600 firms managing assets on behalf of clients, the FCA emphasises that tokenisation — the digital representation of assets using distributed ledger technology (DLT) — can play a transformative role in reshaping how people invest.

In a newly released consultation paper, the FCA noted that tokenised investment products could “increase competition, expand consumer choice, and open new channels for fund distribution, including to first-time investors.” Beyond accessibility, the regulator highlights that tokenisation can improve operational efficiency by reducing reconciliation and data-sharing costs across fund operators and distributors.

To encourage adoption, the FCA plans to issue guidance for operating tokenised fund registers under existing rules through the UK’s Blueprint model. Additionally, it is exploring a streamlined dealing model to simplify how fund managers process the buying and selling of units—whether in traditional or tokenised funds.

A comprehensive roadmap is also under development to tackle challenges around public blockchain use and on-chain settlement of transactions.

According to Simon Walls, Executive Director of Markets at the FCA, tokenisation represents a “fundamental shift in asset management,” offering tangible benefits to both firms and consumers.

“Tokenisation has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers. The UK has the opportunity to be a world leader here, and we want to give asset managers the clarity and confidence they need to deliver,” he stated.

Rahul Bhushan, Global Head of Investment Products at ARK Invest Europe, welcomed the FCA’s initiative, noting that blockchain-based instruments such as stablecoins could modernise settlement and expand access responsibly.

“Successful adoption depends on clear regulatory alignment and responsible implementation to ensure transparency, interoperability, and investor confidence,” he added.

With this move, the FCA is signaling a strong commitment to modernising the UK’s financial ecosystem, using blockchain technology to enhance transparency, efficiency, and inclusivity in asset management.