FCA Supports Tokenisation to Boost Efficiency and Innovation in Asset Management

The Financial Conduct Authority (FCA) has announced new plans to support the adoption of tokenisation within the UK asset management industry, signalling a major step forward for financial innovation and operational efficiency.

Published on 14 October 2025, the consultation paper CP25/28: Progressing Fund Tokenisation outlines how tokenisation—the digital representation of assets using distributed ledger technology (DLT)—can transform fund operations, reduce costs, and open new investment opportunities.

The UK’s asset management sector, which oversees around £14 trillion in assets across 2,600 firms, is a cornerstone of the country’s financial services industry. The FCA’s initiative aims to position the UK as a world leader in digital asset innovation by giving firms greater clarity on how tokenisation can be implemented under existing regulatory frameworks.

Under the proposals, the FCA introduces several key developments:

• Guidance on Tokenised Fund Registers under current FCA rules, aligned with the UK’s ‘Blueprint’ model.

• A Streamlined Dealing Model for both traditional and tokenised funds to improve efficiency in unit transactions.

• A Roadmap for Fund Tokenisation, addressing barriers such as public blockchain use and on-chain settlement.

• Discussion on Regulatory Evolution, setting the stage for future reforms as tokenisation models mature.

Simon Walls, Executive Director of Markets at the FCA, said tokenisation “has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers.” He emphasised that the regulator stands ready to collaborate with the industry to ensure the UK maintains its competitive edge in global financial innovation.

Beyond enhancing competition and investor choice, tokenisation could broaden access to private markets and infrastructure investments, while improving cost-efficiency and transparency across the value chain. By enabling faster data reconciliation and reducing administrative overheads, the FCA believes the technology could unlock more personalised and affordable investment options for consumers.

The consultation also supports the FCA’s wider Digital Assets Roadmap, reaffirming its commitment to fostering responsible innovation while ensuring robust investor protection and market integrity.

Read the press release here.