FCA Finalizes Regulatory Framework for Onchain Fund Registers

The Financial Conduct Authority has finalized new rules allowing UK-authorized funds to maintain their registers on a distributed ledger. This regulatory shift integrates tokenized assets into the existing fund management regime, effectively removing the requirement for a parallel traditional record-keeping system. By enabling funds to use blockchain technology for ownership verification, the regulator aims to reduce the administrative friction currently associated with fund operations.

Implementation of Direct-to-Fund Dealing Models

Beyond ledger digitization, the FCA has introduced a new Direct-to-Fund dealing model. This framework allows investors to interact directly with the fund for the issuance and redemption of tokens. By bypassing certain intermediary layers, the model is designed to streamline the lifecycle of fund units. The regulator intends for these changes to maintain the same level of investor protection as traditional funds while leveraging the speed and transparency of blockchain-based settlement.

These updates apply to authorized open-ended funds, including Undertakings for Collective Investment in Transferable Securities and Qualified Investor Schemes. The FCA has specified that firms must ensure their chosen technology remains compatible with existing anti-money laundering and know-your-customer requirements. The focus remains on operational resilience, requiring firms to demonstrate that their onchain systems can handle the same volume and security standards as legacy platforms.

Operational Integration and Market Access

For asset managers, the transition to onchain registers represents a shift in how they manage liquidity and shareholder communication. The ability to issue tokens directly to investors could alter the role of transfer agents and custodians in the UK market. Firms seeking to adopt these models must now align their internal compliance protocols with the updated FCA handbook requirements.

This development follows broader efforts to modernize the UK financial landscape, similar to the regulatory progress seen in other jurisdictions like the EU under MiCA. As firms evaluate the technical requirements for these new models, the focus will shift toward the interoperability of these registers with existing banking infrastructure. For those tracking broader institutional adoption, this update provides a clear path for integrating digital assets into standard portfolios, a theme explored further in The Strategic Shift of 2026: Five Entrepreneurs Defining Institutional Integration.

AlphaScala data indicates that technology-focused firms are increasingly navigating these regulatory shifts, with UiPath Inc. (PATH stock page) currently holding an Alpha Score of 58/100, reflecting a moderate outlook within the sector. As the FCA begins to process applications under these new rules, the next concrete marker will be the first wave of fund managers submitting updated prospectuses that incorporate onchain register provisions. Market participants should monitor these initial filings to gauge the industry's appetite for the Direct-to-Fund model and the speed at which traditional managers transition their existing fund structures to the new framework.