UK FCA proposes new transitional provisions for selected crypto rules

The UK’s cryptoasset regulatory regime goes live on 25 October 2027. The Financial Conduct Authority published its final rules earlier this year and has now drafted new transitional provisions which are intended to defer the impact of certain rules to smooth the introduction of the new regime. Firms have until 12 October 2026 to comment on the FCA’s proposals.

In its quarterly consultation paper No. 53, CP26/32, the FCA proposes deferral arrangements for:

• the admission and disclosure (A&D) requirements for qualifying cryptoassets on UK QCATPs serving UK retail investors,

• the execution venue requirements on UK-authorised dealers and arrangers serving UK retail and elective professional clients, and

• the execution policy requirement for these firms.

Deferral of A&D requirements

Under the FCA’s CRYPTO rulebook, from 25 October 2027, operators of qualifying cryptoasset trading platforms (QCATPs) serving UK retail investors must reasonably satisfy themselves that the admission to trading of qualifying cryptoassets is not likely to be detrimental to the interests of retail investors and publish a qualifying cryptoasset disclosure document (QCDD).

The FCA is now proposing a six-month deferral of these requirements for qualifying cryptoassets that are already trading on QCATPs. The purpose of the deferral is to give retail UK QCATP operators time to bring their existing backbook of qualifying cryptoassets in line with the new rules. Assets first admitted after authorisation fall outside the deferral and must comply with the A&D requirements in full.

To benefit from the deferral, QCATP operators must meet certain conditions. For example, they must apply during the application window, submit a list of the relevant qualifying cryptoassets to the FCA and provide a roadmap for assessing and publishing QCDDs for the backbook of cryptoassets.

The arrangement operates on an asset-by-asset basis. For any given qualifying cryptoasset, the deferral ends when the QCATP operator publishes a QCDD for that asset. This means that different assets on the same platform may exit the deferral at different times.

During the deferral period, QCATP operators and intermediary firms must make certain disclosures to their retail clients and provide a pre-execution risk warning in a prescribed form.

Deferral of execution venue requirements

Under the new regime, UK-authorised intermediaries will be required to ensure certain orders are ultimately executed on certain UK-authorised execution venues. But, before the regime goes live, these intermediaries may not know which venues are going to be authorised.

To give firms time to adjust, the FCA proposes deferring the application of its execution venue requirement for retail and elective professional orders for a period of three months from go-live.

Deferral of execution policy requirements

Similarly, intermediary firms subject to execution policy requirements may struggle to update, and obtain client consent to, their order execution policy before the regime starts.

The FCA proposes deferring the application of its execution policy requirements for a three-month period from go-live to give firms time to update their execution policies and to obtain client consent. Firms should nevertheless provide clients with a high-level execution policy during this period.

Next steps

The FCA seeks feedback on CP26/32 by 12 October 2026. Overall, QCATPs and intermediaries will welcome the intention behind the proposals to avoid “cliff-edge” risks when the regime starts to apply. Firms should consider whether the proposals provide enough time to ensure full compliance and whether the detail of the conditions for the transitional provisions is workable.

Separately, later this month the FCA is due to finalise its perimeter guidance for cryptoasset activities. It will also open its gateway to start receiving applications for cryptoasset licences and variations of permission.