The UK Financial Conduct Authority (FCA) has published its Handbook Notice 128 which (among other things) confirms Handbook changes made by the Digital Securities Depositories Instrument 2025 (FCA 2025/14). The instrument makes changes to the glossary and market conduct sourcebook sections of the FCA handbook confirming how the FCA Handbook applies to authorised persons carrying out digital securities depository and ancillary activities in the FCA's digital securities sandbox. In summary, the core functions of a digital securities depository and category 1 ancillary activities (being activities which are carried on for the purpose of enabling those core functions) will be treated as unregulated activities, while category 2 ancillary activities (being other ancillary activities not classed as category 1) will continue to be subject to relevant parts of the FCA Handbook, as applicable.
This change was made in conjunction with updates to the UK Bank of England and FCA guidance on the operation of the digital securities sandbox (on 27 March) confirming how ancillary services would be included in a participant firm's sandbox approval notice. The updates also clarify that banking-type ancillary service providers would need to hold Part 4A permission to accept deposits, and other relevant permissions, to carry on any other regulated activity for both core cash settlement and other ancillary banking services.
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