UK urged to permit token-based funds

The Investment Association, which represents asset managers, has proposed approving token-based funds in the United Kingdom. Financial Times reports.

The authors of the initiative are convinced that its implementation would deliver substantial cost savings for investors and simplify existing procedures for buying and selling mutual funds.

The association hopes to secure the creation of a dedicated task force to study how DLT technology can accelerate the creation of new products and services.

According to the publication, such blockchain funds could emerge by the end of the second quarter of 2023, if the FCA approves their introduction.

Currently, the fintech group Fund Admin Chain formed for this purpose is cooperating with the London Stock Exchange and four global asset managers.

“Tokenised funds could deliver greater transparency, instant settlements, improvements in data and analytics. … We need regulatory support to ensure that the United Kingdom remains competitive relative to other jurisdictions,” — said Brian McNulty, head of Fund Admin Chain.

The Investment Association is also seeking from the FCA permission for traditional mutual funds to hold cryptocurrencies and other digital assets.

Britain’s digital, culture, media and sport minister Chris Philp has said plans to turn the country into a «криптоцентр».

In March 2022, the Bank of England published the framework principles for forming the regulatory framework for cryptocurrencies, with a view to future risks to financial stability.

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