The UK’s Financial Conduct Authority (FCA) has approved newrules that allow tokenized funds to operate fully within the existingauthorized fund regime, rather than in separate experimental structures.Singapore Summit: Meet the largest APAC brokers you know (and those you still don't!).The changes give asset managers a clearer route to keep fundregisters on blockchain and to use an optional Direct‑to‑Fund(D2F) dealing model, while keeping current investor protection standards inplace.Onchain Fund Registers Under the Blueprint ModelIn Policy Statement PS26/7, the FCA confirms that authorizedfunds can run their unitholder registers on distributed ledger technology usingthe industry “Blueprint” model.Onchain transaction records may serve as the primary booksand records for unit deals, and firms do not need a full off‑chainmirror if they maintain appropriate operational resilience plans.The guidance applies to UCITS and other authorized funds andallows registers to sit on public DLT networks if firms meet the regulator’sexpectations on governance, data privacy and financial crime controls. Units in a single share class can be recorded acrossmultiple blockchains as long as investors’ rights and the structure of chargesremain the same.Direct-to-Fund Dealing Model to Support TokenizationThe main rule change is the introduction of the optionalDirect‑to‑Funddealing model, which alters how subscriptions and redemptions are processed.Under D2F, the fund or its depositary, rather than the asset manager, becomesthe counterparty to investor trades, so units are issued or canceled directlyagainst cash flows between investors and the fund in a single step.The FCA says this should make operations more efficient andeasier to align with onchain or shortened settlement cycles. Following industryfeedback, the regulator will still allow managers to deal as principal in unitsof a fund using D2F and to combine different dealing models within an umbrellastructure.Looking ahead, the FCA outlines a roadmap from tokenizedfunds to tokenized assets and ultimately tokenized cash flows, including modelswhere investors hold tokenized assets in digital wallets and managers use smartcontracts to manage portfolios.Keep reading: “Tokenisation Isn’t About Technology”: Singapore Builds Cross-Border Market InfrastructureIt also signals openness to waivers that would let funds usedigital cash and stablecoins for settlement and certain expenses, ahead of abroader crypto asset and stablecoin regime due to take effect in October 2027.The FCA's journey toward approving tokenized funds has beenbuilding since 2023, when it collaborated with industry groups to publish theUK Blueprint model outlining how firms could run tokenized unitholder registerswithin existing legal frameworks.Running parallel to this tokenization roadmap, the FCA hasbeen developing a comprehensive crypto asset regulatory regime that began withlegislation passed in February 2026. It launched a sterling stablecoin sandbox inMarch 2026, and will open firm authorization applications in September ahead of the full regime taking effect next year.This article was written by Jared Kirui at www.financemagnates.com.