UK to Bring Crypto Firms Under Financial Services Law by October 2027
Bill to extend FCA supervision, finalize rules by end of 2026, and address stablecoins, custody and trading venues.
Web3 Wavefronts - Digestible News on Crypto, DeFi and AI · theWeb3.news
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Show Notes
Show description: The government will introduce a bill this week to bring digital asset firms under financial services law and shift oversight from anti-money-laundering registration to Financial Conduct Authority supervision by October 2027. Lawmakers plan to finalize detailed rules by the end of 2026 and to run consultations through 2026 on trading venues, custody, stablecoin payments and related topics. The Financial Conduct Authority, working with HM Treasury, will extend governance, consumer protection, market conduct and operational resilience requirements that currently apply to banks, broker-dealers and payment firms to crypto exchanges, dealers and agents. The new framework will require formal authorization routes, fit and proper assessments for senior managers, prudential and conduct rulebooks, client asset protections, trade surveillance, incident reporting, and ongoing supervisory engagement. Custody providers will face segregation and reconciliation duties and market conduct rules will cover disclosures, order handling, conflicts of interest and pricing obligations. The Bank of England and the FCA will coordinate on stablecoin issuance and payment use while the Bank of England’s review will assess systemic risks, interoperability with payment systems, reserve composition and possible limits on certain wholesale uses or holdings. Supervision will include proactive supervisory cycles, thematic reviews and enforcement powers for market abuse, conduct failures and consumer redress, and regulators will be able to mandate skilled person reviews or other remediation. Firms should prepare gap assessments, authorization roadmaps, custody and reconciliation reviews, enhanced trade surveillance and incident reporting capabilities, and engagement with consultations; global firms should map the UK regime against other jurisdictions to identify licensing overlaps and gaps.
Source: https://web3businessnews.com/policy/uk-crypto-regulation-2027-deadline/
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