FSMA Extension refers to the application or broadening of the Financial Services and Markets Act (FSMA) to cover additional financial activities, products, or entities. In the context of digital assets, this typically means bringing certain cryptocurrency-related services or tokens under the regulatory oversight of financial authorities. It aims to provide greater consumer protection and market stability. This expands the reach of existing financial regulations.
Context
The state of FSMA Extension in relation to digital assets is a subject of ongoing legislative and regulatory deliberation in jurisdictions that utilize FSMA as a primary financial statute. A key discussion involves classifying various digital assets and activities to determine which aspects fall within the extended regulatory perimeter. Future revisions to these orders will likely center on clarifying the legal status of specific crypto offerings and establishing a clear framework for their supervision.
Firms must immediately audit operational models against new UK regulated activities, integrating prudential and conduct rules into core compliance architecture.
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