The United Kingdom has introduced new regulations that will give the national financial watchdog sandbox oversight rules for tokenized securities, according to an official publication on Monday.
This regulation covers the UK’s Digital Securities Sandbox (DSS) and will come into effect on 8 January 2024. These regulations are part of the UK government’s Financial Services and Markets Act 2023 (FSMA).
Digital Securities Sandbox Supervision Regulations
The new rules set overall limits on what can be done within the sandbox and which participants can participate. The sandbox allows regulators and companies to test solutions, including distributed ledger technology and securities tokenization.
The Treasury said oversight of the new rules would be a joint effort between the Bank of England and the Financial Conduct Authority (FCA). “The Bank and the FCA must take such steps as they consider appropriate to co-operate with each other in relation to the operation and supervision of the DSS,” the bill states.
Progress comes after that. UK Chancellor of the Exchequer Jeremy Hunt outlined new government initiatives to boost the expansion of the UK’s digital asset sector in his November Budget.
UK digital securities sandbox
Hunt said in November that the UK government plans to implement a Digital Securities Sandbox, which aims to promote the adoption of digital assets across financial markets.
The Chancellor of the Exchequer said: “The government will put in place the legal instruments to implement a digital securities sandbox, implementing the Edinburgh Reform announcement to implement a financial markets infrastructure sandbox in 2023.”
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