CurveBlock
The Permanent Operating Regime (POP) is the FCA's intended successor to sandbox-style testing for digital securities and tokenised fund models. Rather than a single prescriptive rulebook, POP is being developed around regulatory objectives: legal clarity, consumer protection, market integrity, operational resilience and proportionality. That means firms issuing tokenised fund interests will be assessed on whether their designs deliver the same protections as traditional financial instruments, while avoiding unnecessarily blocking technological innovation.
Key regulatory design themes are transparency, custody and segregation, systems and controls, and market fairness. Transparency covers prospectus-level disclosure adapted to digital formats and the clear presentation of fees, liquidity terms and redemption mechanics. Custody and segregation are central: regulators expect arrangements that prevent commingling of investor assets and that map cleanly to legal title. Operational resilience includes cyber security, business continuity and audit trails that permit effective supervision.
POP is also being framed to address secondary-market functions: clear recordkeeping, trade reporting and mechanisms to avoid market abuse are priorities. Importantly, the regime is meant to be technology neutral — regulators will judge outcomes and consumer protections rather than mandate specific ledger implementations. For retail investors this means the focus will be on how a product is governed and administered, not merely that it is blockchain‑based.
For retail savers considering fractional digital shares in property or renewables, these design principles matter in practice. They determine the visibility of holdings, the strength of custody protections, the robustness of distribution and redemption mechanics, and the degree to which a platform is supervised — all factors that influence whether a tokenised fund can responsibly broaden access to real assets.