ISDA Responds to FCA on Progressing Fund Tokenization

On November 21, ISDA responded to the Financial Conduct Authority’s (FCA) consultation paper CP25/28 on progressing fund tokenization.

In the response, ISDA focuses on the use of tokenized assets as both cleared and non-cleared derivatives collateral. Tokenization presents a significant opportunity in the derivatives market, improving risk management through the accelerated movement of collateral and is critical to facilitating 24/7 trading with sound risk management practices.

To realize these benefits, it is vital to ensure the risk management, legal enforceability and deep liquidity foundations that underpin collateral movements in traditional markets are maintained when transitioning to distributed ledger technology and using tokenized assets as collateral.

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ISDA Response to FCA on Fund Tokenization

On November 21, ISDA responded to the Financial Conduct Authority’s (FCA) consultation paper CP25/28 on progressing fund tokenization. In the response, ISDA focuses on the use of tokenized assets as both cleared and non-cleared derivatives collateral. Tokenization presents a significant...