The Investment Association (IA) – the trade body for the UK investment management industry – today launched its ‘UK Crypto Assets Regime: How the investment management industry can navigate new waters’ report, produced in collaboration with Travers Smith.
Aimed at fund and investment managers involved in digital markets or crypto asset activities and their service providers such as depositaries, the guidance helps firms understand the scope and impact of the new regulated activities regime and explains how they can take advantage of innovation.
This report comes as the UK recently revealed a roadmap for its crypto assets regulatory regime, expected to come into force on 25 October 2027, which will bring a wide range of cryptoasset‑related activities into full FCA regulation for the first time and affects investment firms handling digital assets. The paper builds understanding of the range of crypto asset-related business activities which will become subject to the new regulation, and outlines whether firms need to consider varying their existing regulatory permissions.
Key guidance from the IA’s UK Crypto Assets Regime: How the investment management industry can navigate new waters report includes:
- Firms should now begin the process of understanding how their digital asset activities and wider business models will be impacted by the new regulatory framework and future digital market evolution.
- Firms should then either begin planning for a variation of permission application or, for entities not currently engaged in digital markets, an application for FCA authorisation.
- Even if their digital asset-related activities fall outside the new regulatory framework, firms should ensure registration under the existing Money Laundering, Terrorist Financing and Transfer of Funds (MLRs) crypto asset regime where required.
- Firms should continue to monitor further FCA guidance and supervisory statements, which may help clarify areas of uncertainty within the new framework.
Commenting on the guidance, John Allan, Director of Innovation and Operations Unit and Director of Engine, 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 profound innovation.
“Our report provides clear, practical guidance to help firms understand the implications of the new regime, assess their regulatory exposure, and make informed decisions that position them competitively for the opportunities ahead in digital markets.”
Natalie Lewis, Head of Fintech, Market Infrastructure and Payments at Travers Smith, said: “The industry has been calling for clarity over the UK’s approach to the regulation of cryptoassets for a number of years. With the legislation now in place and detailed final FCA rules expected relatively soon, now is the time for fund and investment managers to begin analysing the impact of the new framework on their current and planned business models. October 2027 will come around quickly and understanding a firm’s potential touchpoints with the new cryptoasset rules will be crucial, particularly as more investment activity moves on-chain.
“We’re delighted to have had the opportunity to partner with the IA on producing this latest report, which considers the new regime from the perspective of managers looking to operate tokenised funds, and those who are expecting to invest in cryptoassets on behalf of their clients. Although there are still some complexities in the regime which will need to be worked through, this report is intended to be a helpful launching pad for firms as they look to harness the exciting potential offered by the digital markets of the future.”
