On 4 November 2024, the Financial Conduct Authority (FCA) issued a statement welcoming the first industry-led Project Guardian report on tokenisation in the asset management sector.
Background
Project Guardian is an international collaboration of industry and regulators, led by the Monetary Authority of Singapore (MAS), that explores the use of fund and asset tokenisation. The report was produced by its asset and wealth management workstream.
The FCA is a member of Project Guardian’s policymaker group and takes part in the asset and wealth management workstream. It explains that together with the MAS and the broader Project Guardian policymaker group, the FCA has worked with Singapore, UK and international firms within the Project Guardian membership to develop the use-cases explored in the report, including at the Point Zero Forum in Zurich.
The statement also flags that the FCA and HM Treasury are observers on the industry-led Technology Working Group of the Government’s Asset Management Taskforce that is considering the implementation of fund tokenisation in the UK.
The report
The report sets out an ‘ambitious, phased vision’ for the use of distributed ledger technology in asset management. It also discusses potential industry and regulatory standards needed to scale tokenisation use-cases and to enable firms and investors to benefit from the technology.
The FCA plans to continue working with Project Guardian members and the sector to support the development and adoption of asset tokenisation.
It also flags that it will collaborate in 2025 with the MAS to explore the regulatory considerations for tokenisation within the asset and wealth management sector, considering as part of the review:
- The regulatory and supervisory principles that could apply to tokenisation use-cases to support consumers and the integrity of markets.
- Any potential regulatory barriers to continuing maturity of tokenisation concepts.