UK FCA issues guidance to support innovation in the fund tokenization sector

Foresight News reports that the UK's Financial Conduct Authority (FCA) has issued guidance to support innovation in the field of fund tokenization. The FCA's published PS26/7 guidance outlines how firms can use distributed ledger technology (DLT) within the framework of existing regulatory rules. The new regulations will also enhance fund trading efficiency, including an optional "Direct-to-Fund" (D2F) model. This model allows investors to trade directly with funds, whether they are traditional or tokenized.

The announcement states that tokenization is a method of representing assets or asset ownership using distributed ledger technology. Tokenization is expected to reduce costs and create investment opportunities for a broader audience.