How major jurisdictions regulate tokenized securities and funds

What is being regulated

A tokenized security is a conventional financial instrument (a share, bond or fund unit) whose ownership record sits on a distributed ledger, a shared database maintained across several computers, instead of only in a traditional register. A tokenized fund applies the same idea to fund units.

The common regulatory starting point is technology neutrality: “same activity, same risk, same rules.” Singapore’s Monetary Authority (MAS) states this most directly in its revised Guide on the Tokenisation of Capital Markets Products (December 8, 2025), which assesses tokens on their economic substance rather than their label. The differences lie in the infrastructure rules: who keeps the register, which venues may trade the tokens, and what money they settle against.

United States: relief first, rules later

Under SEC Chair Paul Atkins, the Commission’s Project Crypto (launched in 2025) has favored targeted relief while formal rulemaking proceeds. Three steps matter for tokenized securities:

• DTC tokenization pilot. On December 11, 2025, SEC staff issued a no-action letter allowing the Depository Trust Company to tokenize entitlements to Russell 1000 stocks, major index ETFs and US Treasuries for three years from launch, transferable 24/7 between registered participant wallets.
• Transfer agent modernization. On September 1, 2026, the SEC proposed updating transfer agent rules largely unchanged since the late 1970s, explicitly accommodating blockchain-based ownership records, with a 60-day comment period.
• Innovation exemption. On September 17, 2026, the SEC granted a five-year exemptive pilot under Exchange Act Section 36 allowing limited trading of tokenized US stocks on permissioned venues that are not registered exchanges, subject to conditions such as identical shareholder rights and no synthetic exposure.

European Union: a pilot waiting for reform

The EU’s Markets in Crypto-Assets Regulation (MiCA) deliberately excludes anything that qualifies as a financial instrument under MiFID II, so tokenized securities stay under existing securities law. The bridge is the DLT Pilot Regime, in force since March 2023, which lets authorized market infrastructures trade and settle tokenized instruments with targeted exemptions. Uptake has been modest. Industry signatories warned in February 2026 that its EUR 6 to 9 billion volume caps, narrow asset scope and six-year license limit risk pushing activity to the US.

On December 4, 2025, as part of its Savings and Investments Union agenda, the Commission proposed the Market Integration and Supervision Package (MISP). For the pilot, it would raise the aggregate cap to EUR 100 billion, extend eligibility to all MiFID II financial instruments including derivatives, remove the time limit on authorizations and give ESMA a larger role, according to a Taylor Wessing analysis (June 2026). The European Parliament’s ECON committee published draft reports on June 12, 2026 and scheduled its vote for December 1, 2026. Political agreement is expected around the end of 2027.

UK, Singapore and Hong Kong: sandboxes, fund rules and central bank money

United Kingdom. The Digital Securities Sandbox, run by the Bank of England and the FCA, lets firms issue, trade and settle digital securities under modified rules. In a joint call for input published May 18, 2026, the authorities said 16 firms were in the sandbox and set out a path toward permanent rules, with sterling central bank money settlement via RTGS targeted for 2028. Separately, FCA Policy Statement PS26/7 (April 30, 2026, effective on publication) allows authorized funds to treat on-chain records as their primary register, spread a share class across blockchains, and use a direct-to-fund dealing model.

Singapore. MAS combines securities law with industry pilots. Project Guardian has produced fixed income and fund frameworks, Global Layer One (GL1) works on shared, interoperable ledger infrastructure, and BLOOM (announced October 17, 2025) extends settlement in tokenized bank liabilities and regulated stablecoins. In November 2025, MAS said it would trial tokenized MAS bills settled in wholesale central bank digital currency during 2026.

Hong Kong. The SFC’s November 2023 circulars cover tokenized SFC-authorized investment products and tokenized securities-related activities. The government’s LEAP framework (Policy Statement 2.0, June 26, 2025) commits to regular tokenized government bond issuance and a legal review for tokenized assets. On April 20, 2026, the SFC opened secondary trading of tokenized authorized products on licensed virtual asset trading platforms. The HKMA’s Project Ensemble moved to a live pilot, EnsembleTX, from November 13, 2025, running through 2026 for tokenized deposit settlement.

Switzerland and the UAE: purpose-built and multi-regulator

Switzerland. The DLT Act, fully in force since August 1, 2021, created “ledger-based securities” in civil law and a new DLT trading facility license. SIX Digital Exchange (SDX) was licensed in 2021 as a DLT exchange and central securities depository. FINMA approved BX Digital (Boerse Stuttgart Group) as the first DLT trading facility in March 2025, with launch subject to conditions.

United Arab Emirates. Rules depend on location. In Abu Dhabi Global Market, the FSRA treats tokenized securities as digital securities under its existing securities regime. In the Dubai International Financial Centre, the DFSA runs a Tokenisation Regulatory Sandbox launched in March 2025, which moved to live testing in July 2025. Onshore Dubai, VARA regulates asset-referenced virtual assets linked to real-world assets under rules amended in May 2025 and clarified in April 2026.

Why it matters and what to watch

For allocators, the regime determines where a tokenized product can be sold, who may hold it, whether it can be traded after issuance and whether it can be posted as collateral.

• Legal certainty varies. Pilots and no-action relief can be narrowed or not renewed; statutes like Switzerland’s are harder to change.
• Settlement asset gaps. Most regimes still lack routine on-chain central bank money, which the UK targets for 2028 and Singapore and Hong Kong are piloting.
• Cross-border mismatch. A token eligible in one market may not be eligible in another, limiting liquidity.

Dates to watch: the close of the SEC transfer agent comment period, the European Parliament ECON vote on MISP (scheduled December 1, 2026), MAS tokenized bill trials, and UK follow-up to the 2026 call for input.

Sources and further reading

• Morgan Lewis: SEC no-action relief for DTC tokenization services
• The Block: SEC proposes transfer agent rule modernization (Sep 1, 2026)
• Taylor Wessing: DLT Pilot Regime reform under the MISP
• Regulation Tomorrow: FCA PS26/7 on progressing fund tokenisation
• Charles Russell Speechlys: SFC framework for secondary trading of tokenised products
• Swiss State Secretariat for International Finance: DLT, blockchain and tokenisation