The future of fund tokenisation

Asset management representatives have been exploring the commercial use of fund tokenisation - ie, issuing units recorded on a distributed ledger instead of more traditional systems of record-keeping. Charlotte Hill and Shaanil Senarath-Dassanayake discuss fund tokenisation, the UK Technology Working Group's Blueprint and Phase Two Report, as well as next steps for the asset management industry.

Charlotte Hillis a partner and head of the Financial Services Regulatory group at Taylor Wessing in London, whereDaniel Hirschfieldis senior counsel - Knowledge andShaanil Senarath-Dassanayakeis an associate. Contact them on c.hill@taylorwessing.com, d.hirschfield@taylorwessing.com and s.senarath-dassanayake@taylorwessing.com.

On 26 March 2024, the Technology Working Group (TWG) published a report on the second phase of its work, titled 'Further Fund Tokenisation: Achieving Investment Fund 3.0 Through Collaboration' (Phase Two Report). [1] The Phase Two Report builds on the TWG's first report titled 'UK Fund Tokenisation - A Blueprint for Implementation' [2] (Blueprint) published on 24 November 2023. The reports, which benefited from the involvement of HM Treasury (HMT) and the Financial Conduct Authority (FCA), highlight the desire to harness innovative technologies in the United Kingdom's asset management industry, with investment fund tokenisation being one way to do so.