FCA Finalizes Cryptoasset Perimeter Guidance Ahead of October 2027 Regime Start

Key Takeaways

• The FCA's PS26/18 finalizes new PERG 18 perimeter guidance, largely as consulted on, to help firms determine whether their cryptoasset activities require authorization when the new regime begins on 25 October 2027.
• The application window opens 30 September 2026, and existing registrations or permissions will not convert automatically.
• Compliance teams should start perimeter assessments now, because the guidance does not yet reflect a pending statutory instrument that will change some business model outcomes.

Deep Dive

The FCA's PS26/18 finalizes new PERG 18 perimeter guidance, largely as consulted on, to help firms determine whether their cryptoasset activities require authorization when the new regime begins on 25 October 2027. The application window opens 30 September 2026, and existing registrations or permissions will not convert automatically. Compliance teams should start perimeter assessments now, because the guidance does not yet reflect a pending statutory instrument that will change some business model outcomes.

PS26/18 responds to 78 responses to CP26/13 (60% generally supportive) and confirms the FCA is proceeding broadly as consulted on, with targeted clarifications. The guidance interprets the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 and covers the new specified investments (qualifying cryptoassets and qualifying stablecoins) and seven new regulated activities. These are issuing qualifying stablecoins in the UK, safeguarding and arranging safeguarding, operating a qualifying cryptoasset trading platform, dealing as principal, dealing as agent, arranging deals, and arranging staking. Lending and borrowing fall within the dealing and/or arranging activities. The FCA expanded the guidance on the "by way of business" test, which is narrower than the general FSMA test, and on territorial scope ("in the UK"), which can capture services provided to UK consumers by overseas firms. It also expanded the guidance on distinguishing qualifying cryptoassets from specified investment cryptoassets, on assets that are "solely a record" of rights or value, and on hybrid token structures.

The FCA states that PERG cannot expand, narrow or alter the legislative perimeter, and that only the courts can interpret legislation authoritatively. It declined requests for more worked examples and business-model-specific guidance, and for new exclusions. Firms with decentralized, infrastructure-provider, tokenization, or hybrid models should therefore expect to rely on their own facts-based analysis, legal advice, or individual guidance from the FCA. Respondents' most common requests concerned territorial scope (42% on the Introduction) and tokenized assets (33% on specified investments).

The regime commences on 25 October 2027. The application window opens 30 September 2026 and closes 28 February 2027 for firms wanting to use the savings provisions. The Government has laid a statutory instrument that will change the scope of arranging and dealing and the treatment of UK qualifying stablecoins. The FCA plans to consult in early Q4 2026 on related PERG amendments and to publish final guidance in early 2027. The core regime rules published on 30 June 2026 (PS26/9 to PS26/13) remain settled.

Compliance teams should:
- Map all current and planned activities against the seven regulated activities and the by-way-of-business and in-the-UK tests.
- Decide on application timing relative to the 28 February 2027 savings cutoff.
- Review MLR-registered, Payment Services Regulations, and Electronic Money Regulations entities, since none convert automatically.
- Assess overseas and cross-border models, including reliance on the Overseas Persons Exclusion.
- Confirm financial promotions readiness.
- Engage the Prudential Regulation Authority if dual-regulated.
- Monitor the statutory instrument and the Q4 2026 consultation, and book pre-application meetings.

The main risks are inadvertent perimeter breaches, missed application deadlines, and reliance on guidance that will be superseded for affected business models. Unauthorized activity after commencement carries enforcement and financial promotion exposure. Firms in gray areas, such as staking, stablecoin use in payments, tokenized assets, and DeFi-adjacent services, face the greatest uncertainty and should document their perimeter reasoning thoroughly.

Source: Financial Conduct Authority