Guidance Note on the Tokenisation of Investments and Other Assets in the Bailiwick of Guernsey (July 2026)

Summary

This is a GFSC guidance note explaining how existing Bailiwick of Guernsey investment, securities and financial crime laws apply when funds, securities or real-world assets are tokenised using distributed ledger technology (DLT). It does not create a new licensing regime but applies a same activity, same risk, same regulatory outcome approach, clarifying that tokenisation does not change underlying regulatory obligations. It expressly does not apply to stablecoins.

• Tokenised funds: Funds tokenising units, shares or partnership interests must continue to comply with the Protection of Investors Law and underlying rules on custody, segregation, record-keeping and safeguarding, whether processes are on-chain, off-chain or hybrid; the licensed Designated Administrator and Nominated Firm retain their existing responsibilities.
• Tokenised securities: Tokens with the features of a Category 2 controlled investment are regulated as such; persons carrying out restricted activities in relation to them need POI Law licensing, and the Prospectus Rules apply to offerings unless an exemption applies.
• Corporate service providers: Existing requirements to appoint a Bailiwick-licensed corporate service provider for securitisation-type structures continue to apply to tokenised securities issuances, including related CDD/AML obligations.
• Real-world assets: Tokenisation via a Guernsey SPV is treated similarly to tokenised securities; native/direct tokenisation (no intermediary entity) may fall within the LCF Law's VASP licensing framework, and firms are encouraged to engage the Commission early to confirm licensing.
• Blended/multi-asset tokens: Structures may exhibit CIS characteristics (especially where actively managed) and would then be regulated as such; firms should engage the Commission to clarify classification.
• Risk controls and disclosure: Governing bodies of funds/issuers and their regulated service providers must maintain a proportionate control framework for tokenisation-specific risks and be able to demonstrate its effectiveness to the Commission on request; tokenisation-specific risks must be disclosed to investors under existing disclosure rules (e.g. Prospectus Rules, fund rules).

Overall the guidance reiterates that AML/CFT/CPF obligations, licensing requirements and disclosure rules already in force apply fully to tokenised arrangements, while flagging technology-specific risks (DLT register limitations, smart contract governance, third-party/outsourcing dependence) that firms should manage and disclose.

Key obligations

• Funds tokenising interests must continue to comply with POI Law requirements on custody, segregation of assets, record-keeping and safeguarding regardless of whether processes occur on-chain, off-chain or through hybrid arrangements.
• The licensed Designated Administrator remains responsible for administering the fund even where DLT or third-party technology supports administration or record-keeping.
• The fund's Nominated Firm remains responsible for meeting Schedule 3 and Handbook CDD/AML requirements for investors.
• All licensed service providers to a tokenised fund must comply with the Bailiwick's AML/CFT/CPF regime irrespective of technology used.
• Any person carrying out a restricted activity in respect of a token treated as a Category 2 controlled investment must be licensed under the POI Law.
• Offerings of tokenised securities must comply with the Prospectus Rules unless an exemption applies.
• Where a Bailiwick-licensed corporate service provider is required for traditional securitisation structures, the same requirement continues for tokenised securities issuers, including associated AML/CFT/CPF obligations and CDD/Enhanced CDD on secondary trading.
• Firms undertaking native/direct tokenisation of real-world assets should discuss plans with the Commission to confirm applicable licensing under the LCF Law.
• The governing body of each tokenised fund or security issuer, together with regulated service providers, must establish and maintain a control framework proportionate to the arrangement's nature, scale and complexity, and demonstrate its effectiveness to the Commission on request.
• Tokenisation-specific risks that affect investors (e.g. technology, custody/wallet/key management, legal ownership, governance, operational risks) must be disclosed to investors in accordance with existing disclosure requirements.

Applies to

Collective investment schemes (CIS)/funds, Licensed Designated Administrators, Nominated Firms, Licensed service providers to funds, Issuers of tokenised securities (Category 2 controlled investments), Bailiwick-licensed corporate service providers, Virtual asset service providers (VASPs), Persons carrying on controlled investment business or restricted activities under the POI Law