The Investment Association (IA) has urged asset managers to begin preparing for the UK’s upcoming crypto assets regulatory regime, publishing A guidance to help firms understand the upcoming rules.
The report, produced in collaboration with law firm Travers Smith, is aimed at fund and investment managers involved in digital markets or crypto asset activities, as well as service providers such as depositaries.
The guidance follows the UK government’s roadmap for a crypto assets framework, expected to come into force on 25 October 2027. The regime will bring a range of cryptoasset-related activities into full regulation by the Financial Conduct Authority for the first time, affecting investment firms that deal with digital assets.
The guidance sets out which crypto-asset activities will fall within the regulatory perimeter and whether investment managers may need to update their existing permissions to continue operating. It also urges firms to assess how their digital asset activities might develop under the new framework and whether additional regulatory approvals will be required.
Firms already active in digital markets may need to apply to the FCA to vary their permissions, while those not currently authorised but planning to enter the crypto sector may need to seek full FCA authorisation under the new regime.
Even where firms’ digital asset activities fall outside the scope of the upcoming framework, they may still need to comply with existing anti-money laundering requirements, including registration under the crypto asset regime established under the Money Laundering, Terrorist Financing and Transfer of Funds regulations.
The IA recommended that firms continue to monitor further guidance from the FCA, including supervisory statements that may clarify areas of uncertainty as the regulatory framework develops.
ESMA’s push for direct control on crypto: less about safety, more about market turf
John Allan, director of innovation and operations unit and director of Engine at the IA, said: “Investment managers are at a pivotal moment in the evolution of digital markets, as DLT enables transformative new ways of transacting in tokenised funds, digital representations of mainstream assets, and increasing exposure to native cryptoassets. Beyond ensuring compliance, firms have a critical opportunity to use this shift both as a strategic initiative and a catalyst for innovation.”
Natalie Lewis, head of fintech, market infrastructure and payments at Travers Smith, said: “With the legislation now in place and detailed FCA rules expected relatively soon, now is the time for fund and investment managers to analyse the impact of the new framework on their current and planned business models,” she said. “October 2027 will come around quickly, and understanding a firm’s potential touchpoints with the new cryptoasset rules will be crucial as more investment activity moves on-chain.”
