New Regime for Cryptoasset Regulation
The FCA has published further guidance outlining the UK’s forthcoming FSMA-based regulatory framework for cryptoassets. The new regime will bring a broad range of cryptoasset activities fully within the FCA’s remit for the first time, replacing the existing anti- money laundering registration framework with a comprehensive authorisation model.
Under the proposed structure, firms undertaking cryptoasset issuance, trading, custody and related activities will be required to seek full FCA authorisation. Conduct of business standards, prudential requirements, safeguarding obligations and senior management accountability will align more closely with those applicable to traditional financial services firms.
The shift represents a structural development for digital asset markets in the UK. Firms currently operating under the Money Laundering Regulations should assess the gap between existing compliance frameworks and the forthcoming authorisation expectations.
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Good Practice and Risks in ETPs for Retail Investors
The FCA has highlighted supervisory observations regarding exchange traded products marketed to retail investors. The review identifies areas of good practice alongside recurring risks, particularly in relation to disclosure clarity, product complexity and suitability considerations.
Firms are expected to ensure that marketing materials are fair, clear and not misleading, and that retail communications appropriately explain underlying risk exposures, leverage mechanics and liquidity considerations.
Increased scrutiny in this area reflects broader supervisory focus on retail investor protection and product governance under Consumer Duty principles. Boards should ensure oversight arrangements extend to marketing strategy, target market identification and ongoing product monitoring.
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Further Consultation on Rules for Cryptoasset Firms
The FCA has launched CP26/4, seeking feedback on additional conduct, governance, safeguarding and reporting requirements for cryptoasset firms ahead of the new regime’s implementation.
The consultation addresses:
- Capital and prudential expectations
- Client asset safeguarding models
- Governance and SMCR alignment
- Financial promotion standards
- Reporting and disclosure requirements
The direction of travel is clear: cryptoasset firms will be expected to operate to standards comparable to other regulated financial services firms. The consultation period closes in March 2026, with implementation expected to follow thereafter.
Firms engaging in crypto-related activity should consider early preparation, particularly in relation to governance documentation, capital adequacy planning and operational resilience frameworks.
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Public Offers and Admissions to Trading Regime
New guidance has been issued following the introduction of the Public Offers and Admissions to Trading Regulations 2024. The reforms are intended to streamline capital raising in the UK, broaden access to public offers and recalibrate disclosure thresholds, while maintaining investor protection standards.
The new regime replaces the previous EU Prospectus Regulation framework and introduces a more flexible approach to admissions to trading, particularly for growth markets. However, the emphasis on disclosure integrity and market abuse compliance remains central.
Issuers and advisers should review:
Thresholds triggering prospectus requirements Disclosure expectations for growth market admissions
Ongoing reporting obligations Interaction with financial promotion rules
While the reforms aim to enhance competitiveness, they do not reduce governance or conduct standards. Execution discipline remains critical.
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What This Means for Firms
Regulatory change is increasingly moving from policy consultation to supervisory enforcement. Firms should assess not only technical rule changes but also the FA’s evolving expectations around governance culture, disclosure standards and operational resilience.
In particular, firms operating at the intersection of traditional capital markets and digital assets should ensure that compliance frameworks, financial promotion processes and senior management accountability structures are aligned with the expanding regulatory perimeter.
Early preparation remains the most effective way to mitigate regulatory risk and preserve strategic flexibility.
Please contact us if you would like to discuss any of the developments covered in this update, or if you require support assessing the potential impact on your business.
