Solomon Samuel 
Regulatory support is being extended to investment administrators in the United Kingdom so that they may tokenize funds using blockchain technology, thereby abandoning traditional record-keeping systems.
The Investment Association posits in a recent report that the implementation of fund tokenization—the issuance of tokenized units or shares on distributed ledger technology (DLT)—will result in enhanced transparency and efficiency within the financial sector.
In particular, the implementation of a single, real-time record-keeping system by all parties involved in the fund’s operations will hasten settlement times and simplify the reconciliation process, cutting down on fund administration costs.
According to Sarah Pritchard, executive director of markets and international at the Financial Conduct Authority (FCA),at the Financial Conduct Authority (FCA), the regulator places equal importance on outlining the potential risks and investigating novel approaches for asset managers.
In the interim, specific principles for the implementation of tokenized funds were put forth in the report. These principles encompass avoiding an overly narrow emphasis on the investment asset manager industry and ensuring relevance to both domestic and international investors.
The report recommended providing opportunities to a broad spectrum of firms operating in the sector without favoring any particular firm type, product category, asset class, or consumer segment.
Moreover, it emphasized the necessity of a corresponding strategic plan for implementation and a concentration on efficiency and competitiveness in the industry.
The fund must abide by established financial industry standards in addition to having FCA authorization and being based in the UK. Additionally, it specified that the legal and regulatory frameworks would remain unchanged.
The U.K. government, in an additional statement, reaffirmed its endorsement of the blueprint model and affirmed its dedication to enhancing innovative methodologies domestically.
This follows recent reports that investment firms in the United Kingdom have increased the number of personnel assigned to digital assets.
One-fourth of asset managers and hedge funds in the United States, the United Kingdom, and Europe have hired senior executives to supervise digital asset strategies.
A survey found that 24% of asset management firms have implemented a digital asset strategy, and an additional 13% have expressed intentions to do so within the following biennium.