On 15 September 2026, HM Treasury laid before Parliament the draft Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026 (the draft Regulations), which will make targeted amendments to the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (the Cryptoasset Regulations).

The following day, the FCA published a policy statement (PS26/18) finalising the cryptoasset perimeter guidance which it consulted on in April (and which we discussed at the time). The perimeter guidance now sits in a new Chapter 18 of the FCA’s Perimeter Guidance Manual (PERG). PS26/18 finalises PERG 18 broadly as consulted on, with the most material additions concerning the meaning of "by way of business" and territoriality.

The two publications do not yet align, as PS26/18 reflects the Cryptoasset Regulations as made in February 2026 and does not account for the impact of the draft Regulations. The FCA therefore plans to consult on targeted PERG 18 amendments, including revisions to certain provisions on arranging and dealing as well as other activities relating to UK qualifying stablecoins.

The draft Regulations

As outlined in its July consultation, HM Treasury intends to bring stablecoin payments within its forthcoming reformed payments regime. However, given the expected implementation timelines, there will be an interim period between when the UK cryptoasset regime and the new UK payments regime take effect. To avoid a scenario where multiple permissions are required in relation to the same activity, the draft Regulations propose a number of related exclusions from certain regulated cryptoasset activities. 

The draft Regulations’ exclusions are principally related to “UK qualifying stablecoin” payments, broadly defined as qualifying stablecoins issued by a firm with the relevant Part 4A permission to issue qualifying stablecoins. The draft Regulations will amend the Regulated Activities Order 2001 (RAO), the Financial Promotion Order 2005 (FPO) and the Cryptoasset Regulations. 

Below, we have summarised the key RAO exclusions that would be introduced by the draft Regulations:

• Exclusions from (i) dealing in qualifying cryptoassets as principal (Article 9T), (ii) dealing in qualifying cryptoassets as agent (Article 9W) and (iii) arranging deals in qualifying cryptoassets (Article 9Y): 
  • transfers of a UK qualifying stablecoin, and exchanges of that stablecoin for another asset (including money or another UK qualifying stablecoin), would generally be excluded from the dealing and arranging regulated activities. That exclusion would not cover an exchange for a qualifying cryptoasset (other than a UK qualifying stablecoin), or a transfer or disposal subject to a right of return; and
  • permission to deal or arrange would not be required where a firm receives a qualifying stablecoin under a title transfer cryptoasset collateral arrangement (which will have a specific meaning set out in the RAO, broadly where ownership of a cryptoasset is transferred legally and beneficially, to secure or guarantee financial obligations) or acquires one under an agreement pursuant to which the seller contracted to buy back the qualifying stablecoin. This exclusion would not apply if the collateral provider or counterparty to the repurchase agreement (i) is a consumer or (ii) falls within a category specified by FCA rules. No such categories have yet been specified.
• Exclusions only applicable to safeguarding of qualifying cryptoassets and relevant specified investment cryptoassets (Article 9N): 
  • temporarily holding a UK qualifying stablecoin to execute a payment transaction will be excluded from the cryptoasset safeguarding activity; 
  • there will also be an exclusion from the safeguarding activity for temporary safeguarding of qualifying cryptoassets to facilitate the settlement of a transaction where it is ancillary to dealing, arranging, operating a qualifying cryptoasset trading platform (QCATP) or arranging qualifying cryptoasset staking; 
  • arrangements made in relation to a UK qualifying stablecoin by an authorised qualifying stablecoin issuer relating to assets held to maintain a stable value of those stablecoins would also be excluded from the cryptoasset safeguarding activity; and
  • any activity carried on under arrangements relating to specified investment cryptoassets that are operated by a recognised or third-country CSD would also be excluded from the scope of the cryptoasset safeguarding activity. The exclusion is conditional on the CSD undertaking to the person for whom the asset is safeguarded a responsibility which is no less onerous than it would assume if it safeguarded the asset itself. This is intended to align the treatment of tokenised securities held through CSDs with that of traditional securities.
• Exclusion only applicable to dealing in qualifying cryptoassets as principal (Article 9T): the following would generally be excluded from the dealing as principal activity: (i) an activity carried on otherwise than for the purpose of providing a service to another person; or (ii) market making on a QCATP.
• Exclusion only applicable to arranging deals in qualifying cryptoassets (Article 9Y): there is a new “technical services” exclusion from the arranging activity where a person that is neither authorised nor a payment service provider merely provides a technical service that allows another person to access services provided by a third person (who is carrying on a regulated activity and is authorised or exempt) or a decentralised protocol.

Additionally, the FPO will be amended to treat issuing a qualifying stablecoin as a controlled activity and a qualifying stablecoin as a controlled investment, and to introduce several new exemptions from the financial promotion restriction. Two notable exemptions, under the new Article 73ZAA, cover communications in respect of dealing, arranging and advising on investments relating to: (i) the transfer or exchange of a UK qualifying stablecoin; and (ii) receiving or acquiring qualifying stablecoins under a title transfer cryptoasset collateral arrangement applicable to the qualifying stablecoin, unless the collateral provider or seller: (i) is a consumer; or (ii) is a person who has been specified in rules made by the FCA. Further amendments extend existing overseas communicator exemptions to cryptoasset activities and exempt communications required or permitted by the cryptoasset market abuse regime, QCATP rules or the FCA. 

PS26/18 and PERG 18

As PS26/18 reproduces the draft guidance broadly as consulted on, we have focused below on the material additions and clarifications in PERG 18:

• By way of business: the general prohibition set out in the Financial Services and Markets Act 2000 (FSMA) provides that no person may carry on a regulated activity in the United Kingdom, or purport to do so, unless they are authorised or exempt.  A fundamental part of that test is whether a firm is carrying on a regulated activity “by way of business”. The FCA notes that the Cryptoasset Regulations apply a narrower “by way of business” test as the Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 will be amended by the Cryptoasset Regulations. As a result, a person will only be regarded as carrying on a regulated activity by way of business if they carry on the business of engaging in one or more such activities. The FCA notes therefore that the effect of this narrower test is that the relevant regulated activity must itself form part of the person’s business, rather than merely occurring in the course of other activities carried on by that person, or merely because that person engages in cryptoasset markets. This is particularly relevant to those firms providing services relating to cryptoassets, rather than those which are merely using services provided by another.  We note that the response to PERG 18.2 provides that:  “In practical terms, the ‘business of engaging in’ formulation is intended to focus the perimeter on persons whose business model involves providing, performing, operating or otherwise being engaged in the relevant activity as an activity of their business (for example, as a service to paying customers), as opposed to persons who are merely using such services as a customer, or who participate in those cryptoasset activities on their own account as an occasional activity.” 
• Territoriality: in addition to considering whether a firm is carrying on a regulated activity “by way of business”, non-UK firms must also consider whether an activity is “carried on in the UK”. This is an assessment which depends on the regulated activity in question and where the “place of supply” of the relevant activity is located.  Particular attention has been given to this concept by industry, as there is no separate “overseas persons exclusion” (which would only be relevant if an overseas person were otherwise deemed to be carrying on the regulated activity in the UK in the first place). The FCA suggests that cryptoasset firms first assess whether the relevant activity would ordinarily be carried on in the UK (applying the general territorial principles under the Act and the guidance in PERG 2.4.1G and PERG 2.4.2G). If not, they should proceed to determine whether a cryptoasset-specific deeming provision in section 418 FSMA applies. The following guidance is provided in respect of the section 418 FSMA deeming provisions:
  • Operating a QCATP (Article 9S), dealing in qualifying cryptoassets as principal (Article 9T) or as agent (Article 9W) and arranging deals in qualifying cryptoassets (Article 9Y): section 418 may deem an overseas firm to carry on these activities in the UK if it is involved in the sale or subscription of a qualifying cryptoasset to or by a UK consumer. The FCA clarifies that the deeming rule does not apply if an authorised QCATP operator or a person authorised to deal as principal is interposed and acts in that capacity (we note that this is only of assistance for non-UK persons – there being an authorised person involved does not assist UK persons). An intermediary that is only arranging or dealing as agent does not break the chain. This is essentially what the legislation says and does not add anything new. However, it is interesting to note that in relation to chains of multiple persons who are dealing or arranging for a UK consumer, this may require all persons to be authorised.  The FCA is clear that overseas persons carrying on the relevant activities from outside the UK and involved only in dealing in qualifying cryptoassets with UK institutional clients should not be required to be authorised, unless those institutional clients are acting as intermediaries between the overseas cryptoasset firm and UK consumers (and are not themselves authorised in the UK as a QCATP operator or to deal as principal). 
  • Safeguarding of qualifying cryptoassets and relevant specified investment cryptoassets or arranging for another person to carry on that activity (Article 9N) and arranging qualifying cryptoasset staking (Article 9Z6): for safeguarding, the FCA identifies that essentially, the place where the safeguarding of cryptoassets is deemed to take place is the location of the safeguarding operations and the relevant question of fact is where the requisite degree of control to bring about a transfer of the benefit of the cryptoasset is being, or could be, exercised. This is helpful guidance which is not necessarily obvious from the legislation or the activity (although we note this is a question of law and technically for the courts to determine).  The PERG guidance is considerably less clear in relation to qualifying cryptoasset staking, as the response merely states that “Arrangements made by or for persons in the UK for arranging qualifying cryptoasset staking, and which occur in the UK, are seen as being carried on in the UK.” The new section 418(6E) of FSMA also provides that for both activities, an overseas person is considered to be carrying on these activities in the UK when carrying on the activity on behalf of a UK consumer and where the overseas person is not carrying on the activity at the direction of another person who is authorised under Part 4A of FSMA to carry on that regulated activity.  
  • Issuing a qualifying stablecoin (Article 9M): the FCA’s guidance now provides that issuing a qualifying stablecoin is considered to be carried on in the UK where the three component elements of the activity – the offering, redemption, and maintaining value – are carried on from, or arranged to be carried on from, an establishment in the UK. The FCA then clarifies that the effect of section 418(6B) of FSMA is that a person who is not themselves acting from an establishment in the UK is deemed to be carrying out this regulated activity in the UK where all the elements of the issuing activity are being carried out in the UK on their behalf.  The FCA has also noted that where a person issues qualifying stablecoins but does not meet all the conditions necessary to be carrying on the Article 9M activity, their activities may constitute other regulated activities.  As ever, it will be important to look at the whole service that is being provided.
• “Solely a record”: cryptoassets that are “solely a record” of value or contractual rights fall outside the definition of a qualifying cryptoasset and therefore outside the new regulated activities that can only be carried on in respect of qualifying cryptoassets. The market-based factors proposed in the consultation (such as trading, observable pricing and holder expectations) have also now been removed. Instead, the final guidance proposes that a functional approach to assessing the nature of the cryptoasset is helpful, with a number of considerations suggesting that something is not solely a record. Namely, whether control of the token enables the associated value or contractual rights to be exercised, and whether transferring the cryptoasset is the mechanism for transferring the value or contractual rights. Further, use of a token as part of an authoritative register does not, of itself, mean the token is more than “solely a record” – which will be of particular interest for firms carrying on activities involving tokenised securities and funds.
• MLRs: cryptoasset exchange providers and custodian wallet providers have had to register with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) since 2020, and that regime will continue to operate in parallel to the new regulated cryptoasset activities. The perimeters of the RAO and the MLRs are not fully aligned. For example, the territorial scope of each regime differs as the MLRs apply to UK-based providers, whereas FSMA captures persons carrying on activities in the UK (which could include non-UK persons). Further, a firm falling within an RAO exclusion from a regulated cryptoasset activity must separately consider whether registration under the MLRs is required. However, firms authorised to carry on one or more of the new regulated cryptoasset activities will not need separate MLR registration merely because they also act as a cryptoasset exchange provider or custodian wallet provider – although they must still notify the FCA and comply with the remaining MLR requirements.

Next steps

The FCA plans to consult in early Q4 2026 on further amendments to PERG 18, which will account for the draft Regulations, with final guidance due to be published in early 2027. That consultation will also aim to clarify the temporary settlement exclusion and the regulatory boundary between electronic money and qualifying stablecoins.

The finalised perimeter guidance gives cryptoasset firms a much firmer basis for assessing whether their business will be in scope of the UK’s forthcoming regime. However, firms that may carry on arranging, dealing or other cryptoasset activities affected by the draft Regulations should revisit their analysis once the draft Regulations are finalised (and PERG has been updated). The FCA's authorisation application window opens on 30 September 2026 and closes on 28 February 2027.