The UK’s financial regulator has approved a blueprint model designed to facilitate the tokenization of funds at asset managers.
Investment managers in the UK are getting regulatory support to use blockchain technology to tokenize funds, moving away from traditional record-keeping systems.
In a recent report released by the Investment Association (IA), it argues that fund tokenization, the issuance of tokenized units or shares based on distributed ledger technology (DLT), will lead to a more efficient and transparent financial industry.
In particular, the use of a real-time record-keeping system shared by all parties involved in fund services will reduce fund administration costs, simplify the reconciliation process, and shorten settlement times.
Sarah Pritchard, Executive Director of Markets and International at the UK Financial Conduct Authority (FCA), stressed that while the regulator is willing to explore innovative avenues for asset managers, it must also be aware of the potential risks:
“This is an exciting milestone that paves the way for exploring even more transformative use cases in the future. We hope to support firms in implementing technology solutions that enhance and strengthen the UK’s asset management industry, whilst addressing risks and potential harms.”
At the same time, the report puts forward certain principles for the implementation of tokenized funds.
These principles include ensuring relevance to domestic and international investors and avoiding a sole focus on the investment asset management industry.
“To provide opportunities to the broadest possible range of companies across the industry, rather than focusing on any particular type of company, product type, asset class or client group,” the report states.
Furthermore, it also sheds light on the delivery roadmap that needs to come with it and the focus on competitiveness and efficiency within the industry.
The fund must be established in the UK and authorised by the FCA, while having to adhere to traditional financial industry standards. It further stated that legal and regulatory rules will remain unchanged.
In a separate statement, the UK government reiterated its support for the Blueprint model and announced its commitment to improving domestic approaches to innovation:
“The government warmly welcomes this publication. It will contribute to the wider discussion about the role of technology in asset management and demonstrate that the UK welcomes innovation and is open to exciting new businesses of the future.”
The news follows news that the UK investment firm has been strengthening its workforce dedicated to digital assets.
On September 10, Cointelegraph reported that a quarter of asset managers and hedge funds in the United States, the United Kingdom, and Europe have hired senior executives to oversee digital asset strategies.
The survey showed that 24% of asset managers have adopted a digital asset strategy, and another 13% plan to adopt a digital asset strategy within the next two years. #英国 #监管机构
