Britain’s asset management company calls for blockchain fund management system

LONDON, July 7 (Reuters) – The British Investment Association called on the government and regulators on Thursday to give the green light to tokenized funds using blockchain technology, which could make it easier for retail investors to buy illiquid assets.

Tokenized funds divide their assets under management into fractions, thereby reducing minimum investments and making them more affordable for small investors.

Industry specialists say using and supporting cryptocurrency-enabled blockchain technology to back tokenized funds could also reduce operating costs.

As the pace of technological change continues to accelerate, the investment management industry, regulators and policymakers must work together to promote innovation with no hesitation, said Chris Cummings, chief executive officer of the Investment Association.

The Asset Management Company said in a statement that the government and the Financial Conduct Authority should establish a framework for the operation of tokenized funds. Regulators should also assess the eligibility of cryptocurrencies in investment funds with diversified portfolios. The Passthrough solutions should provide retail and sophisticated investors with new ways to access investment products, including in the illiquid space, thanks to lower investment thresholds and improved liquidity mechanisms through secondary generalized markets.

FundAdminChain is a fund technology company working with the London Stock Exchange and four asset management firms to develop tokenized funds. Brian McNulty, CEO of FundAdminChain refused to disclose the name of the manager.