WIREDGOV

The City Minister’s industry group for examining the impact of technology on the UK’s investment management sector publishes its second report.

The Technology Working Group is chaired by Michelle Scrimgeour. It was established under auspices of the government’s Asset Management Taskforce and is supported by the Investment Association. The Technology Working Group have today, 26 March 2024, published a report on the second phase of its work: Further Fund Tokenisation: Achieving Investment Fund 3.0 Through Collaboration.

This new report builds on the publication of the Technology Working Group’s first report in November 2023, and expands the potential use cases of fund tokenisation first highlighted in that initial report. In particular, the report explores the use of tokens as collateral for money market funds, and the role tokenised funds play in a fully “on chain” investment market that will streamline back-office functionality.

Bim Afolami MP, the Economic Secretary to the Treasury, welcomed the progress set out in this report, saying:

I am delighted to welcome today’s report from the Asset Management Taskforce’s Technology Working Group. 

As we work to grow the economy, the UK is ideally placed to seize on the transformative capabilities of technology in this industry, combining our expertise in innovation and investment management. This report demonstrates – once again – that the UK is on the side of the pioneers.

For the third phase of its work, the Technology Working Group will now shift their focus onto how the UK’s investment management sector can harness the opportunities presented by artificial intelligence.

Background

Tokenisation refers to the issuing of units that are recorded on a distributed ledger, as opposed to units that are recorded on more traditional systems of record-keeping. Transitioning the existing operational infrastructure underpinning investment funds onto a distributed ledger will drive further efficiency and transparency within the sector, and improve its competitiveness.

Technology Working Group members

• Investment Association
• HM Treasury
• Financial Conduct Authority
• EY
• Legal & General Investment Management
• Fidelity International
• Baillie Gifford
• Blackrock
• JP Morgan Asset management
• M&G
• Schroders
• Archax
• Aquis Exchange
• Augmentum
• Calastone
• CMS
• Copperco
• Galaxy Digital
• Hargreaves Lansdown
• Innovate Finance
• London Stock Exchange Group
• NEST
• Northern Trust