CurveBlock
The FCA's sandbox has allowed firms to trial innovations such as tokenised shares and secondary trading under a supervised environment. The Permanent Operating Regime (POP) is intended to be a stable, rules-based framework for digital securities once policy and secondary legislation are in place. For fund issuers this is not merely a technical shift: it represents a migration from experimental permissions and bespoke waivers to scaled, ongoing regulatory obligations that reflect the full consumer and market‑conduct perimeter the FCA enforces.
Operational planning therefore needs to cover governance, client money and custody models, AML/KYC, market abuse and financial promotion controls, recordkeeping, and systems for reconciliations and settlement. Issuers must consider how tokenised registers map to legal title and company law, how transfer finality is achieved, and how platforms will deliver periodic disclosures and prospectus-equivalent materials in a machine-readable form. Firms should anticipate strengthened requirements for resilience testing, incident reporting and outsourced service oversight.
From a practical perspective, managers will need documented change programmes, evidence of investor protections, and clear consumer communications. Testing environments are useful for prototypes, but POP compliance expects production-grade controls and auditability. For retail investors, this transition aims to bring clearer rules on authorisation, conduct and disclosure. That clarity can support broader retail participation in fractional digital shares, though investors should expect differing liquidity and governance characteristics compared with traditional listed securities.