The UK Treasury has launched a new “digital securities sandbox” (DSS) under the Financial Services and Markets Act, which goes into effect January 8, 2024 and provides a firewalled financial laboratory where emerging technologies like blockchain can be vetted for use in broader financial market infrastructure.

The DSS regulations, laid before Parliament today, will enable eligible financial market entities to participate as “sandbox entrants” that can carry out approved activities using developing technologies for a trial period of five years under modified regulatory requirements.

Example activities cited in the act include “operating a trading venue” and carrying on one or more functions related to digital securities, including maintenance, notary services, and settlement. Entities approved to participate can also conduct ancillary activities directly related to those functions.

The instruments that can be used in the sandbox include securities, options, futures, contracts for differences, and rights to or interests in such investments. These can be recorded or settled using the technologies under review.

“The implications of this for both investors and issuers are immense, not least the lowering of fees to all parties, and the speeding up of clearing and settlement (and thus trading),” Go to Source to See Full Article
Author: Decrypt Staff

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