The Financial Services and Markets Act 2023 (Digital Securities Sandbox) (Amendment) Regulations 2025
S.I. 2025/93 · Made 28 January 2025
FINANCIAL SERVICES AND MARKETS
Made 28th January 2025
Laid before Parliament 30th January 2025
Coming into force 3rd March 2025
The Treasury make these Regulations in exercise of the powers conferred by sections 13(1), (5) and (6), 16(1) and 84(2) of, and Schedule 4 to, the Financial Services and Markets Act 2023f1.
In accordance with section 16(2) of that Act, the Treasury have consulted the Bank of England and the FCAf2, and such other persons as the Treasury consider appropriate.
Annotations to the whole text
Footnotes
- f1
- f2
-
The appropriate regulators for the purpose of these Regulations: see section 17(2) of the Financial Services and Markets Act 2023.
Contents
- 1Citation, commencement and extent
- 2Amendments of the Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023
- 3Amendment of regulation 3
- 4Amendment of Part 1 of the Schedule
- 5Amendment of Part 2 of the Schedule
- 6Amendment of Part 3 of the Schedule
- 7Insertion of new Part 6 of the Schedule
- Signature
- Explanatory note
1Citation, commencement and extent
These Regulations may be cited as the Financial Services and Markets Act 2023 (Digital Securities Sandbox) (Amendment) Regulations 2025.
These Regulations come into force on 3rd March 2025.
These Regulations extend to England and Wales, Scotland and Northern Ireland.
2Amendments of the Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023
The Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023f1are amended as follows.
3Amendment of regulation 3
In regulation 3 (creation and operation of an FMI sandbox), in paragraph (8) (appropriate regulator), after sub-paragraph (b), omit the “and” and after sub-paragraph (c) insert —
“; and
(d)in relation to ancillary FMI activities, the FCA and the Bank of England.”.
4Amendment of Part 1 of the Schedule
In Part 1 of the Schedule (modifications of legislation), after paragraph (d), insert—
“(e)Part 6 contains modifications of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017f1.”
5Amendment of Part 2 of the Schedule
In Part 2 of the Schedule (modifications of UK CSDR)—
for the entry for Articles 64 to 66 substitute —
“
Article 64 Treat this article as disapplied. Article 65 In paragraph (1), treat the reference to “competent authority” as a reference to a digital securities depository. Treat the reference to “infringements of this Regulation” as a reference to infringements of requirements (which may include a requirement imposed by a SAN) imposed by or under these Regulations. Treat the reference to “competent authorities” as a reference to the Bank of England. In paragraph (3), treat the first sub-paragraph as imposing a direct requirement on a digital securities depository to have in place the reporting procedures mentioned in that paragraph. Article 66 Treat this article as disapplied. ”;
in the entry for Article 73, in the second column substitute—
“
Article 73 Treat this article as disapplied. ”.
6Amendment of Part 3 of the Schedule
In Part 3 of the Schedule (modifications of FSMA 2000) —
for the first entry for the table insert—
“
Section 20 Treat a reference to a “regulated activity”, in relation to a digital securities depository, as excluding such regulated activity that the digital securities depository carries on in connection with any of the FMI activities under regulation 3(5)(b) or ancillary FMI activities for which it has approval under its SAN; ”;
in the entry for paragraph 21 of Part 3 of the Schedule (modifications of Schedule 17A to FSMA 2000), after the words in the second column insert—
“
Paragraph 21 Treat a reference to section 345E in this paragraph as disapplied. ”
7Insertion of new Part 6 of the Schedule
After Part 5 of the Schedule (modifications of the Uncertificated Securities Regulations 2001) insert—
“Part 6
This Part sets out modifications made to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The provisions specified in the first column are modified as provided for in the corresponding entry in the second column.
Provision Modification Regulation 3 Treat the definitions of “cryptoasset exchange provider” and “custodian wallet provider” as disapplied. Regulation 7(1)(a) Treat paragraphs (viii) and (ix) as disapplied. Regulation 8(2) Treat sub-paragraphs (j) and (k) as disapplied. Regulation 14A Treat this regulation as disapplied. Regulation 27 Treat the references to “cryptoasset exchange provider” and “custodian wallet provider” in paragraph (2) as disapplied. Treat paragraphs (7D), (7E) and (10) as disapplied. Regulation 40 Treat paragraphs (2)(c), 2(d) and 9(e) as disapplied. Regulation 54 Treat paragraph (1A) as disapplied. Regulation 56(1) Treat sub-paragraphs (f) and (g) as disapplied. Regulation 56A Treat this regulation as disapplied. Regulation 58A Treat this regulation as disapplied. Regulation 59 Treat paragraphs (3A)(i), (6)(b) and (8) as disapplied. Regulation 60 Treat paragraph (2A) as disapplied. Regulation 60A Treat this regulation as disapplied. Regulation 60B Treat this regulation as disapplied. Regulations 64A to 64H Treat these regulations as disapplied. Regulations 74A to 74C Treat these regulations as disapplied. Schedule 6 Treat paragraphs 10(c), 11A and 12(ca) to (cc) as disapplied. Schedule 6B Treat this Schedule as disapplied. ”.
Signature
Jeff Smith
Anna Turley
Two Lords Commissioners of His Majesty's Treasury
28th January 2025
Explanatory note
(This note is not part of the Regulations)
Regulation 3 of these Regulations amends regulation 3(8) (appropriate regulator) of the DSS regulations to make further provision about who the appropriate regulator is in relation to certain ancillary FMI activities (as defined in regulation 3(6) of the DSS Regulations).
Regulation 4 amends Part 1 of the Schedule to the DSS Regulations by adding a reference to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692).
Regulation 5 amends Part 2 of the Schedule by making minor changes to the existing modifications to the UK Central Securities Depository Regulation (Regulation (EU) No909/2014). The modifications require a digital securities depository to create and operate a “whistle-blowing” scheme to allow employees to report actual or potential infringements in connection with the digital securities sandbox.
Regulation 6 amends Part 3 of the Schedule. It disapplies section 20 of FSMA 2000 when an authorised person is carrying on FMI activities as a digital securities depository or ancillary FMI activities for what would otherwise be a contravention under that section. It also makes a minor change to the existing modifications made to paragraph 21 of Schedule 17A to FSMA 2000.
Regulation 7 inserts a new Part 6 of the Schedule to the DSS Regulations and makes modifications to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692).
A full impact assessment has not been produced for this instrument, as no, or no significant, impact on the private, voluntary or public sector is foreseen. A de minimis impact assessment of the effect of this instrument is available from HM Treasury, 1 Horseguards Road, London, SW1A 2HQ and is published alongside this instrument on www.legislation.gov.uk.