PS26/7: The FCA Just Published the UK's Fund Tokenisation Rulebook

On 30 April 2026, the Financial Conduct Authority finalised its rules for tokenising UK authorised funds. The rules took effect immediately. The UK now has one of the clearest regulatory frameworks for tokenised funds anywhere in the world and the clock is now ticking.

Most regulatory milestones arrive with consultation papers and long phase-in periods. PS26/7 did not. On 30 April 2026, the FCA published its policy statement on fund tokenisation and the rules entered force the same day. For an asset management sector overseeing roughly £16.5 trillion across around 2,600 firms, that is a notable shift in tempo.

The policy statement, properly titled Progressing Fund Tokenisation, follows the FCA's consultation paper CP25/28 published in October 2025. Industry response was near-universal in support of the regulator's ambition to accelerate fund tokenisation in the UK.

The final framework has been adopted largely as proposed, with several refinements that reflect the substance of the 64 responses received.

For UCITS management companies, UK Alternative Investment Fund Managers running authorised funds, and the depositaries that support them, the practical question is no longer whether tokenisation is permitted. It is how to operate within the framework that now applies.

What PS26/7 Actually Does

Three substantive changes sit at the heart of the policy statement.

First, on-chain records as primary books and records. Previously, even firms operating fund registers on distributed ledger technology were expected to maintain a parallel off-chain record as the canonical version. PS26/7 removes that requirement. The blockchain itself can now serve as the primary register, provided appropriate resilience and contingency arrangements are in place. This is a more significant shift than it may sound. It is the difference between using DLT as a mirror and using it as the source of truth.

Second, public blockchains are not off limits. Some of the most consequential industry feedback during the consultation centred on whether tokenised authorised funds could operate on public networks like Ethereum, or whether the FCA would, in practice, require private permissioned chains. The final guidance confirms that public DLT networks are not viewed as off limits, provided the proper controls are in place. That position aligns the UK with the direction that several pilot projects, including Baillie Gifford's tokenised UCITS feeder fund on Ethereum, were already pointing toward.

Third, a new Direct to Fund (D2F) dealing model. Under the conventional model, when an investor buys units in a fund, the money typically routes through a chain of intermediary accounts before reaching the fund itself. D2F lets investors deal directly with the fund. The rules are optional, applicable to both conventional and tokenised funds, and designed to be adopted by firms as and when they choose. The model has been welcomed by respondents, particularly as firms also consider the operational changes implied by T+1 settlement and broader platform modernisation.

Taken together, these three changes do not create a separate regulatory perimeter for tokenised funds. They clarify how existing rules apply to firms using distributed ledger technology, and introduce one new dealing model that runs in parallel to existing arrangements. The regulator's signal is that fund tokenisation is permitted, supported, and expected to grow.

The Broader Regulatory Picture

PS26/7 does not arrive in isolation. The UK fund tokenisation timeline now reads as a coherent sequence rather than a series of standalone announcements.

Baillie Gifford launched the first tokenised UK OEIC in June 2025, structured as a UCITS feeder fund on the public Ethereum blockchain and advised by CMS. Federated Hermes tokenised the first UK-domiciled money market fund in October 2025. Aviva, in partnership with Ripple, announced a fund tokenisation project in February 2026. Lingfeng Capital launched its Digital Venture Fund on the London Stock Exchange Group's Digital Markets Infrastructure platform, with Archax providing regulated digital issuance and custody, in April 2026.

Each of these moved through the regulator's open-door arrangements before PS26/7 was finalised. The policy statement effectively converts those bespoke regulatory engagements into a standardised framework. Firms no longer need to negotiate the fundamentals from scratch.

The FCA has also set out a roadmap toward what it terms composable finance: modular, distributed ledger technology-based investment processes that can be combined and recombined to support new product structures. Firms exploring tokenised portfolio management are encouraged to engage with the regulator under its existing open-door policy. PS26/7 is, by the FCA's own framing, the first phase of a longer programme.

What PS26/7 Does Not Cover

This is the section worth slowing down for, because it explains why the headlines around fund tokenisation can be misleading when they are read by founders rather than by fund managers.

PS26/7 applies to UK authorised funds. That means UCITS, AIFs and similar collective investment schemes managed by FCA-authorised firms. It does not apply to the tokenisation of company shares directly, to the issuance of tokens by operating companies, or to the primary-issuance platforms used by unlisted businesses to raise equity. Those activities sit under a different regulatory regime: financial promotions, the prospectus regime, the question of whether a particular activity is regulated at all, and the rules on the issuance and trading of unlisted securities.

In short, PS26/7 is the rulebook for tokenising regulated investment products. It is not the rulebook for tokenising your company. Anyone reading a headline that says "the FCA has approved tokenisation" should keep that distinction in mind. What has been approved is a clear path for a specific type of regulated fund product.

The wider question of how UK companies can issue tokenised equity, and how investors can subscribe to it under existing financial promotions rules, sits alongside PS26/7 but operates under different sections of the FCA Handbook. PISCES, the regulated secondary market regime for private shares, addresses some of the secondary trading questions. The Cryptoassets Regulations 2026, with applications opening in September 2026 and the regime in force from October 2027, will address others. PS26/7 is a piece of a larger picture, not the whole picture.

Direction of Travel

Three things follow from PS26/7 that are worth tracking over the next twelve months.

Firms that have so far concentrated their tokenisation work on money market funds and short-duration bond funds, where the operational case is cleanest, now have explicit cover to extend that work into more complex authorised structures. The path to tokenised feeder funds investing in private-asset strategies, including PE and VC, is shorter than it was a fortnight ago.

Service providers will adjust. Transfer agents, depositaries, fund administrators and platforms now have to make build-versus-partner decisions about how to operate within a framework that explicitly contemplates on-chain books of record and direct-to-fund dealing. Several of those decisions will become visible over the summer.

And the line between fund tokenisation and equity tokenisation will become a more frequent conversation. Founders reading about PS26/7 will reasonably ask whether the same principles apply to issuing their own shares. The answer is no, the regulatory architecture is different, but the underlying technology and many of the same service providers are common to both. The two halves of the tokenisation story will increasingly need to be told together.

The UK has not solved every question about tokenised finance. It has, however, given the asset management sector a working rulebook for one of the most important categories within it. The interesting work now is what gets built on top of it.

Disclaimer

This article is provided for general information only and does not constitute legal, financial, or investment advice. The regulatory treatment of tokenised assets and digital securities varies by jurisdiction and continues to evolve. Readers should seek independent professional advice before making any financial, legal, or regulatory decisions.