What are the common challenges startups face in equity tokenisation?

The most common challenges include navigating FCA regulatory requirements, selecting the right tokenisation platform, structuring the legal framework for tokenised equity, educating investors unfamiliar with digital securities, and ensuring compliance with the UK Digital Securities Sandbox rules.

What are tokenisation platforms and how do they work?

Tokenisation platforms are regulated technology providers that convert equity or other assets into digital tokens on a blockchain or distributed ledger. In the UK, platforms operating under FCA oversight include those participating in the Digital Securities Sandbox. They handle the technical issuance, custody, and transfer of tokenised securities.

What financial insights should founders know before tokenising equity?

Founders should understand the cost structure of tokenisation (legal, platform, and compliance fees), the valuation implications of fractional ownership, how tokenised equity differs from traditional equity crowdfunding, and the tax treatment of digital securities under UK law.

What investor strategies apply to tokenised equity?

Investors in tokenised equity can benefit from fractional ownership of high-value assets, improved liquidity through secondary market trading on regulated platforms, portfolio diversification across early-stage UK startups, and participation in deals previously accessible only to institutional investors.

What is the UK regulatory landscape for equity tokenisation?

The UK regulatory landscape is governed primarily by the FCA (Financial Conduct Authority) and HM Treasury. Key frameworks include the Financial Services and Markets Act 2023, the Digital Securities Sandbox (DSS), and ongoing FCA consultations on the treatment of tokenised securities. The UK is positioning itself as a global leader in regulated digital securities.

What is equity tokenisation?

Equity tokenisation is the process of converting ownership rights in a company into digital tokens recorded on a blockchain or distributed ledger. These tokens represent shares or equity stakes and can be transferred, traded, or held digitally, subject to regulatory compliance. In the UK, tokenised equity is treated as a regulated financial instrument under FCA oversight.

Six Weeks Left to Shape UK Crypto Rules: Why the FCA's Perimeter Guidance Consultation Matters for Every Tokenisation Business

Shawn Jhanji
May 20
3 min read

For any business building in the UK digital assets space, a consultation paper published by the FCA in late April carries unusually high practical stakes. CP26/13, the FCA's consultation on cryptoasset perimeter guidance, closes on 3 June 2026. What it decides will determine which businesses need FCA authorisation under the new regime and which do not. The window to respond is closing.

What CP26/13 is about

The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, enacted in February 2026, brought a new set of regulated activities for cryptoassets into the FCA's perimeter from October 2027.

The seven regulated activities covered include:

issuing qualifying stablecoins in the UK
safeguarding qualifying cryptoassets
operating a qualifying cryptoasset trading platform
dealing in qualifying cryptoassets as principal or agent
arranging deals in qualifying cryptoassets
and arranging qualifying cryptoasset staking.

CP26/13 is not about what the rules say. It is about what falls within their scope. The FCA is asking the market to help clarify which activities, products and business models are actually captured by the new regime, and which are not. The final guidance, expected in September 2026, will be the primary reference document for authorisation applications.

Why the answer is not obvious

The perimeter questions for cryptoassets are genuinely complex. Several key distinctions matter enormously to business model viability.

First, tokenised versions of existing regulated investments, including equities, bonds and funds, are excluded from the definition of qualifying cryptoasset under the Regulations. This means tokenised equity platforms, tokenised authorised funds and tokenised debt instruments may be regulated under existing financial services legislation rather than the new cryptoasset regime. Understanding which regime applies is essential before submitting an authorisation application, because the capital requirements, governance obligations and conduct rules differ substantially between the two frameworks.

Second, the boundary between operating a trading platform and providing ancillary services to one is a live question. Whether a business is operating a platform or simply providing software infrastructure to one could determine whether it needs full FCA authorisation under the new regime.

Third, DeFi protocols and Web3 user interfaces present specific and very different perimeter questions that the FCA has explicitly flagged in CP26/13. This directly affects founders building decentralised applications or wallet products with any UK-facing dimension. The FCA is not yet providing definitive answers on these, which is precisely why the consultation matters.

Travers Smith has noted that almost immediately after CP26/13 was published, further legislative changes were made to the regulatory perimeter, adding a further layer of complexity. Any business that assumed the framework was settled should review the current position with legal counsel.

The September gateway

The practical timeline makes early action important. The FCA application window for cryptoasset authorisation opens on 30 September 2026, running to 28 February 2027. Final perimeter guidance is expected in September. Businesses that need authorisation should be determining that well before September, because applications for complex business models require detailed legal analysis, compliance infrastructure and governance preparation.

The October 2027 commencement date gives firms roughly a year after the gateway opens to achieve authorisation. Operating without authorisation after October 2027 will constitute a criminal offence for firms carrying on regulated cryptoasset activities. The window is not as wide as it may appear.

What this means for founders and platform builders

For UK-based founders building tokenisation infrastructure, platforms or services, the key questions to work through before September are straightforward in principle but complex in practice. Does the activity fall within the seven regulated activities? If it does, is it excluded by the tokenised investment carve-out? If not excluded, what kind of authorisation is required and what are the capital, operational and governance requirements?

Baker McKenzie, Lewis Silkin, Travers Smith and Linklaters have all published accessible analysis on CP26/13. The FCA's consultation paper itself is available at fca.org.uk and is worth reading directly for any business with a UK digital assets dimension.

Firms have until 3 June 2026 to submit written responses to the FCA. Even for businesses not planning to respond formally, the questions the FCA is asking should prompt an internal review of how the new regime applies to their model.

Key Takeaways

The FCA's CP26/13 perimeter guidance consultation closes 3 June 2026 and will shape which UK businesses require cryptoasset authorisation
Seven new regulated activities come into force in October 2027, with the FCA application gateway opening September 2026
Tokenised equities, bonds and funds may fall outside the new cryptoasset regime under the existing regulated investment carve-out
DeFi protocols, Web3 interfaces and wallet providers face specific and unresolved perimeter questions in the current consultation
Legal analysis of business model scope should start now, not in September, to allow time for compliance preparation before the gateway opens