Norton Rose Fulbright US LLP | Hannah Meakin

United Kingdom

The Financial Conduct Authority (FCA), a regulatory organization in the United Kingdom, has published a package of five major policy statements laying out a comprehensive regulatory scheme for cryptoassets:

  • PS26/9 Crypto Regime: Admissions & Disclosures and Market Abuse Regime for Cryptoassets: FCA policy statement addressing admission to trading, disclosure requirements, and the market abuse framework tailored for cryptoassets.
  • PS26/10 Crypto Regime: Stablecoin issuance: FCA policy statement establishing the regulatory and supervisory framework for stablecoin issuers.
  • PS26/11 Crypto Regime: Regulated Cryptoasset Activities: FCA policy statement defining the scope, boundaries, and requirements for conducting regulated cryptoasset activities in the UK.
  • PS26/12 Crypto Regime: A Prudential Regime for Cryptoasset Firms: FCA policy statement setting out capital, liquidity, and risk management requirements for authorized cryptoasset businesses.
  • PS26/13 Crypto Regime: Application of FCA Handbook for Regulated Cryptoasset Activities: FCA policy statement detailing how existing high-level standards, redress mechanisms, and other modules of the FCA Handbook apply to cryptoasset firms.

Commentary

This is a significant step in bringing crypto into a more established regulatory framework in the UK. By applying familiar financial services standards – including around consumer protection, governance and market integrity – the FCA is aiming to address a number of key risks that may have held back wider adoption.

At the same time, the regulator has clearly sought to reflect how crypto markets operate in practice, with more tailored requirements in areas such as trading and stablecoins. For firms, the focus will now be on preparing for authorization and ensuring they have the necessary systems, controls and organizational arrangements in place well ahead of implementation.

This article first appeared on Lexology | Source