Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to ensure that asset managers issuing tokenised investment funds implement robust cybersecurity measures.

The Financial Services Growth and Competitiveness Strategy sets out a comprehensive ten-year plan to deliver growth and attract investment. Championing innovation is a key priority within this strategy, and the Government is working closely with industry stakeholders and regulators to remove barriers and unlock opportunities presented by new technologies.

Using distributed ledger technology to tokenise funds could support financial market efficiency by enabling more efficient, real-time data sharing which could lower operational costs and enhance resilience.

The Government has published its Wholesale Financial Markets Digital Strategy, which sets out the key steps the UK has to take to digitalise its financial markets, including through the tokenisation of assets. The Government is taking forward various measures in this space, in particular the Digital Securities Sandbox (DSS). The DSS provides a bespoke regulatory framework that enables firms to test, scale and roll out the tokenisation of securities.

Cyber security is a top priority for the Government, and HM Treasury works with the financial authorities, industry and with international partners to strengthen the financial sector’s resilience to threats and hazards of all origins, including cyber risks. This includes the Financial Conduct Authority, whose cyber security requirements mandate firms to have robust governance, effective systems and controls, and comprehensive incident management and business continuity plans.