The FCA has set out plans to support tokenisation as part of a wider move to drive growth in asset management.

The regulator’s plans include guidance to provide firms with additional clarity to aid adoption of this new technology.

FCA figures have shown that around 2,600 firms manage £14trn of assets for UK and global clients, and the regulator stated it is committed to “supporting innovation” to help the UK’s asset management sector continue to grow.

As the way people invest changes in the future, the regulator suggested that tokenisation – which is the digital representation of assets on distributed ledger technology – could help asset managers to innovate and stay competitive.

The FCA said that tokenised products could also drive competition and increase choice for consumers, as well as open new ways to distribute funds, including to those new to investing.

Executive director of markets at the FCA, Simon Walls, commented: “Tokenisation has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers.

“There are many things that firms can do under our existing rules and more that become possible with the changes we propose enacting now. We stand ready to design the next stage with the industry – this publication suggests a path.

“The UK has the opportunity to be a world-leader here and we want to provide asset managers with the clarity and confidence they need to deliver.”

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