Clifford Chance

We were delighted that Jon Relleen, Director of Infrastructure & Exchanges at the UK's Financial Conduct Authority (FCA) was able to join our recent Future of Digital Finance event jointly hosted with GBBC and deliver a keynote speech on the launch of the UK's Digital Securities Sandbox (DSS). The DSS, developed in collaboration with HM Treasury and the Bank of England, allows firms to experiment in a live environment with distributed ledger technology (DLT) for trading and settlement, aiming to enhance efficiency and remove barriers to technology adoption in capital markets.

Our key takeaways:

• Jon officially declared the DSS open for applications, inviting firms to participate and contribute to shaping the future regulatory landscape. He noted that the DSS is designed to adapt to future technologies and business models, providing a platform for firms to test and refine their approaches before permanent regulations are established. Unlike the EU's DLT Pilot regime, the legal framework for the DSS allows legislative modifications trialled successfully to be made permanent without the need for further legislation.
• The DSS will enable firms to combine the functions of a trading venue with security depository roles, using DLT for settlement. This approach aims to streamline financial market infrastructure and improve operational efficiency. Jon encouraged firms to apply for the DSS, emphasising the support available from regulators and the potential for successful models to transition smoothly to a permanent regime.
• Key changes were made to the scope of the DSS pre-launch, taking account of industry feedback. These include extension of the scope of the DSS to include non-sterling denominated assets, greater flexibility in how activity limits will be raised as firms progress through the DSS and reducing the minimum capital requirements for digital securities depositories to give firms greater choice of business models and to enable them to scale up business models gradually in the DSS.
• Jon highlighted the FCA's commitment to supporting innovation while maintaining high regulatory standards. In addition to the DSS, Jon mentioned other FCA initiatives, such as the digital sandbox and innovation pathways, which provide resources and guidance for firms exploring new technologies. He also highlighted the FCA's international collaborations, including partnerships with the Monetary Authority of Singapore and leadership roles in global regulatory bodies such as the Global Financial Innovation Network (GFIN).

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Jon Relleen, Director of Infrastructure & Exchanges, Supervision, Policy & Competition – Markets, Financial Conduct Authority (FCA)

Speaker:

• Jon Relleen, Director of Infrastructure & Exchanges, Supervision, Policy & Competition – Markets, Financial Conduct Authority (FCA)

 

Want more?

You might also enjoy the keynote speech from Ali Moussavi, Head of the Payment Strategy Unit, Bank of England.

See more from our Future of Digital Finance event.