Tokenization given the green light? Authorized by the FCA, the British Investment Association released the "British Fund Tokenization" implementation plan
According to the announcement of the UK Investment Association on November 11, in close cooperation with the Ministry of Finance and the UK Financial Conduct Authority (FCA), it officially released a specific implementation roadmap for the tokenization of UK funds, which will give the green light to the tokenization of the UK fund industry.
UK gives green light to tokenization of funds
The UK Investment Association pointed out that the UK Fund Tokenization project aims to improve efficiency, transparency and competitiveness, and has several characteristics:
- Investment management firms can implement adoption immediately.
- Ability to operate within existing legal and regulatory frameworks.
- Provide valuation and settlement through the same process and time frame.
- Leverage decentralized ledger technology (DLT) for sales and redemptions.
- The fund must be established in the UK and authorised by the FCA, while also following traditional financial industry standards
The report mentions that participants will be able to share real-time records to reduce fund management costs, streamline reconciliation processes, and shorten settlement times, and that the plan is not limited to any specific type of company, product type, asset class, or client group, but It is to provide integration opportunities for a wide range of enterprises as much as possible.
UK Financial Conduct Authority (FCA): Exploring technology to limit risks
Sarah Pritchard, the FCA’s executive director for markets and international, stressed that while regulators are willing to explore new avenues for asset managers to create new opportunities, they must also identify potential risks:
We want to support companies in implementing technology solutions that strengthen the UK asset management industry but also address risks and potential harm.
In another announcement, the British government reiterated its support for the “Tokenization of British Funds” project:
The government strongly welcomes the "British Fund Tokenization" plan, which will further promote related emerging technologies in asset management and also demonstrates the UK's openness to financial innovation.
In fact, there has been a lot of regulatory news in the UK recently, but it seems to be more aimed at cryptocurrency companies rather than blockchain technology.
(The British FCA announces marketing guidelines for encryption companies, and the National Crime Agency is currently recruiting for encryption investigators)
