CurveBlock
The Financial Conduct Authority (FCA) has long-established rules for client money, custody and safeguarding in regulated firms. These rules (commonly referred to as CASS) set out segregation, record-keeping and reconciliation requirements where firms hold client cash or financial instruments on behalf of investors. For traditional fund and share custody the obligations are well understood: assets must be identifiable, reconciled, and there are protections if a custodian fails.
Tokenised or ledger-based property shares bring an operational difference: what appears on a distributed ledger is a representation of an underlying security or beneficial interest. Whether those ledger entries meet the FCA definition of a safeguarded asset depends on the legal wrapper used and whether the firm is carrying out regulated activities. Where a platform holds client money or custody of regulated securities, CASS applies. Where tokens represent unregulated property rights, safeguarding may rely on property and company law rather than CASS protections.
Practically, platforms use layered controls: legal structures that separate beneficial ownership, regulated permissions for custody or dealing, operational segregation of wallets/accounts, audited reconciliations, insurance and independent custodians or registrars. Retail-facing platforms vary in which protections they apply and how they disclose them.
For retail investors considering fractional digital property shares, the key implication is that custody and safeguarding design materially affects risk. Understanding whether holdings are protected under FCA CASS, held by an independent custodian or represented via company registers helps clarify the legal and operational protections behind a fractional holding.