UK Regulator Shakes Up Asset Management Balancing Regulation With Tech Innovation

U.K. regulator, Financial Conduct Authority (FCA), has a progressive stance towards the future of asset management.

Drawing insights from a discussion paper released by the FCA, the regulator's focus on proportionate regulation and its role in driving innovation is evident.

As digital assets gain momentum worldwide, the FCA's approach couldn't have been more timely, especially with the upcoming Benzinga's Future of Digital Assets conference on Nov. 14, where similar groundbreaking topics will be discussed.

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The FCA's primary priorities for reform in the asset management sector include creating a more proportionate framework for alternative fund managers, modernizing the regime for retail funds, and fostering technological innovation.

A significant highlight was the emphasis on fund tokenization.

The FCA has been in collaboration with the Technology Working Group under the Treasury's Asset Management Taskforce to construct a blueprint for fund tokenization, which is set to be unveiled later this year.

Recognizing the potential of distributed ledger technology (DLT) in the future of funds, the regulator has already conducted a tech sprint with industry stakeholders to gauge necessary policy initiatives and rule adjustments to support fund tokenization.

Furthermore, the FCA underscores its commitment to ensuring that U.K. regulations are in harmony with international standards without introducing undue complexities for firms operating globally.

They aim for a balanced approach that promotes long-term competitiveness without compromising consumer protection, market integrity, and competition.

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