United Kingdom: Consultation closed on updating and improving the UK regime for asset management including unregulated tokens

On 22 May 2023, the UK Financial Conduct Authority (FCA) closed its consultation on the discussion paper titled “Updating and improving the UK regime for asset management”. The paper considers the regulation of fund managers and individual portfolio managers and focuses on the requirements around how those managers operate. In particular, the paper explores the possibility of broadening the scope of "eligible assets" to include unregulated tokens, such as stablecoins and other forms of cryptocurrency. Furthermore, the paper addresses the issue of how fund regulation should respond to the implications of a growing market in tokenised financial instruments, "tokenised portfolio assets". Finally, the paper also addresses "fund tokenisation", which is understood as the ability to issue a fund's rights of participation (units or shares) to investors as digital tokens, usually by means of a distributed ledger.