Jurisdiction(s):
United Kingdom

Key definition

Fungibility definition

What does Fungibility mean? In legal practice, fungibility describes assets or goods where each unit is equivalent and mutually interchangeable, so an obligation can be satisfied by delivering any conforming unit rather than a specific item. The concept is used across commercial contracts, commodities trading, securities settlement, collateral, set-off and netting, and insolvency. It is largely a descriptive expression rather than a defined statutory term, though some instruments refer to fungible securities (for example, the Financial Collateral Arrangements (No. 2) Regulations 2003), and case law discusses interchangeable goods held in bulk. A key practical effect is that performance, delivery, appropriation to the contract...

Fungibility of debt securities in English law: when additional issuances form a single series, prospectus requirements, interest date alignment, temporary non‑fungibility and Regulation S lock‑up considerations

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Practice notes

What does this Practice Note cover?

This Practice Note sets out the concept of fungibility and its practical importance for additional issuances of debt securities.

When are debt securities fungible?

Debt securities, and other assets, are fungible when they are largely indistinguishable and can be exchanged freely for trading purposes. Fungibility is a fundamental attribute of debt securities issued on the same date as part of a single series. Such instruments are, as a rule, issued on identical terms and are interchangeable for all purposes. When the securities are traded, the seller can complete settlement by delivering the traded nominal amount of the securities, with no need to deliver any specific individual securities. Without this characteristic, trading the securities would be practically impossible. For information on trading debt securities, see Practice Note: UK Debt securities—trading, settlement and custody. Historically, fungibility was a material question for same‑day, single‑series issues when debt securities were produced in definitive bearer form—each security being an individual, negotiable, security‑printed document, typically bearing a unique serial number—and it was necessary to be satisfied that the individual securities could be traded interchangeably...

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Web page updated on 21/05/2026

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