FCA publishes feedback on distributed ledger technology
The Financial Conduct Authority (FCA) has published its feedback on its discussion paper on distributed ledger technology (DLT).
Earlier in the year, the FCA revealed plans to seek views on the potential for future development of DLT in the markets it regulates.
As a result, the FCA says it received 47 responses from a range of market participants including regulated firms, national and international trade associations, technology providers, law firms and consultancies.
With DLT gaining public prominence as it’s the technology behind cryptocurrencies. The FCA says this paper is not about cryptocurrencies, but rather its consideration of ways that DLT can impact financial services and the regulatory implications.
According to the feedback, support was expressed for the FCA maintaining a “technology-neutral” approach to regulation.
Its feedback also suggested that current FCA rules are “flexible” enough to accommodate the use of DLT by regulated firms and no changes to specific rules were proposed.
However, some respondents doubted the compatibility of permissionless networks. Although, overall the FCA says it’s open to all forms of deployment of DLT (including permissioned and permissionless DLT networks) providing the operational risks are identified and mitigated.
Working in collaboration with HM Treasury, the Bank of England, the Information Commissioner’s Office and others, the FCA is to ensure a co-ordinated approach towards DLT in the UK.
While, at an international level, the FCA says it will work closely with national and international regulatory bodies to shape regulatory developments and standards.
ICO no go?
On the initial coin offering (ICO) market, the FCA will gather further evidence and conduct a further examination of its developments.
FCA says its findings will help to determine whether or not there is a need for further regulatory action in this area beyond the consumer warning issued in September.