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Jurisdiction(s):
United Kingdom

Tokenised funds and digitalisation: UK and international regulatory developments, FCA guidance, implementation roadmap, benefits, risks and next steps for practitioners

Practice notes
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Scope of this Practice Note

This Practice Note:

  • sets out what fund tokenisation and digitalisation mean and how they diverge from conventional funds;
  • surveys UK and overseas regulatory moves, highlighting current UK workstreams;
  • details practical steps to launch a tokenised fund;
  • evaluates the benefits of distributed ledger technology (DLT) for funds;
  • flags principal challenges and risks; and
  • suggests next steps for practitioners.

What is fund tokenisation and digitalisation?

Fund tokenisation involves capturing elements of a fund’s administration and investor rights as digital tokens recorded on a blockchain ledger. A token digitally mirrors a standard unit or share in a UK authorised fund. The investor’s legal interest remains that of a traditional unit/share; the novelty lies in the representation and maintenance of ownership and fund records. In a traditional UK authorised fund, the unit/share register, asset register and client data sit in conventional book‑entry systems across multiple service providers. Reconciliations between separate platforms are routine and typically run in batches. Transactions complete through established intermediaries, while investor communications and corporate actions are processed via existing messaging standards and provider workflows...

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Harry Middleton
Harry Middleton

Harry is involved in all aspects of work relating to investment funds, both regulated and unregulated. Harry advises a number of large asset managers and 'host' authorised corporate directors on various matters relating to the structure and operation of regulated funds including: the establishment of umbrella and standalone OEICs and authorised unit trusts (UCITS, NURS and LTAFs); mergers/schemes of arrangement; fund terminations; fund range rationalisations and repositioning; new sub-funds; and various ad hoc changes and updates to their fund ranges. Harry has experience in large-scale project management, corporate transactions in the financial services sector, regulatory and advisory work, legal drafting and negotiation. Harry also assists clients with investment management agreements, depositary agreements and platform and distribution arrangements, and advises clients in relation to on-going regulatory and compliance matters, including the application of the UCITS directive, AIFMD, MiFID II, the Benchmark Regulation and ESG...

Web page updated on 22/05/2026

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