UK funds have received approval to develop tokenization in order to enhance efficiency, transparency, and competitiveness in the investment management industry. The Investment Association, the representative group for the industry in the UK, has announced this development. The Technology Working Group of the Government’s Asset Management Taskforce, in collaboration with the Financial Conduct Authority (FCA) and HM Treasury, has published a roadmap for the adoption of distributed ledger technology (DLT)-enabled fund tokenization. This roadmap, titled “UK Fund Tokenisation: A Blueprint for Implementation,” proposes the use of digital tokens on DLT to represent investors’ interests, replacing traditional record-keeping methods. The Chair of the Working Group and CEO of Legal & General Investment Management, Michelle Scrimgeour, believes that fund tokenization has the potential to revolutionize the industry by improving efficiency, liquidity, risk management, and portfolio customization. The blueprint recommends a staged approach, starting with a baseline model that complies with current regulations. Initially, FCA-authorized funds can tokenize if they meet certain criteria, such as holding mainstream assets and maintaining existing valuation schedules and settlement timeframes. These funds would operate similarly to traditional funds, with off-chain fiat currency settlement, while leveraging DLT for transactions and ownership records. The report also mentions the possibility of exploring public ledgers and interoperability in later stages. The industry will continue to work closely with authorities to address any legislative or regulatory impacts.

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Information	Details
Geography	Europe
Countries
Sentiment	positive
Relevance Score	1
People	Michelle Scrimgeour
Companies	Legal & General Investment Management, Technology Working Group, Financial Conduct Authority (FCA), The Investment Association, HM Treasury, Government’s Asset Management Taskforce
Currencies	None
Securities	None