Financial markets

The Digital Securities Sandbox is open. The Bank of England and the FCA run it. It is a regulated live environment for the notary, maintenance and settlement of financial securities, on their own or together with a trading venue. One example is issuing, trading and settling them on distributed, programmable ledgers. It is due to run until 8 Jan 2029. HM Treasury may extend it by legislation. The dashboard was still publishing approval notices.

Gate 2 is the stage at which a firm can carry out live business under initial limits. A firm with only a Gate 1 notice has no permission for any live activity until it is approved at Gate 2. The dashboard listed Gate 1 notices for 17 firms. Three of them also had a Gate 2 notice: HSBC Bank plc, dated 13 Jul 2026; ClearToken CSD Limited, dated 18 Sep 2026; and LSEG B3 Limited, dated 23 Oct 2026. This card does not list the other firms. The notices are on the dashboard. The section on limits shared across firms will be updated once entrants go live, and it will then show those limits. It showed no figure.

Each of the three Gate 2 notices says the firm has passed Gate 2 and is approved as a digital securities depository. The firm may carry out the activities in the notice, in a live environment, subject to the conditions in the notice. None of the three says a security has been issued.

What can be issued there includes equities, corporate and government bonds, money market instruments, units in funds, and emissions allowances. Trading and settling derivative contracts, and unbacked cryptocurrencies such as Bitcoin, are out of scope. Bitcoin is on Money and payments. Someone using a sandbox firm's services needs to keep the risks in mind. An entrant does not at once have to meet the same standards of resilience as a fully authorised financial market infrastructure.

Firms in the sandbox can apply to use particular stablecoins as the asset that settles the payment. The Bank decides each one against minimum requirements. No coin is named.

The gilt has not been issued. The Digital Gilt Instrument (DIGIT) is a government debt instrument that is digital from the start. The Bank of England describes it as one that will be issued on a platform in the Digital Securities Sandbox. The Bank calls that issuance real but experimentational. The pilot is HM Treasury's. The Bank is supporting it by considering DIGIT as collateral in SMF operations, by supporting issuance through the sandbox, and by working out options for how the cash side settles. The Bank's page does not name a platform or a date.

The first transaction will take place by the first quarter of 2027, on HSBC's digital securities depository, HSBC Orion. HSBC was appointed the platform provider in Feb 2026. HSBC and the London Stock Exchange Group have signed a memorandum of understanding. HSBC Orion would be the issuer's depository, and the group's depository an investor depository. The government expects to list DIGIT on the London Stock Exchange's main market. A gilt has not been issued.

Barclays, HSBC, Lloyds, Morgan Stanley, NatWest and RBC Capital Markets have been appointed joint lead managers for the pilot. That appointment finishes the procurement and lets talks with investors begin. The pilot is expected by the first quarter of 2027. A gilt has not been issued.

The guidance and the rules are in force. Policy statement PS26/7 was published on 30 Apr 2026. The FCA has finalised its guidance on fund tokenisation and its new rules on dealing direct with a fund. They take effect immediately.

The guidance covers how an authorised fund manager can use distributed ledger technology inside the FCA's current rules. It names an industry model, the Blueprint, and more advanced uses. Handbook guidance has been added for a fund manager who wants to keep the register of unitholders on a distributed ledger.

An optional model lets an investor deal directly with the fund, whether or not the fund is tokenised. A firm decides whether to use the rules for a new scheme or an existing one. The statement applies to UCITS management companies, to UK alternative investment fund managers of authorised funds, and to depositaries of authorised funds.

Tokenisation, here, means representing an asset, or ownership of an asset, with a record on a distributed ledger.

These are experiments. There is no live service. The Bank is developing a way for its real-time gross settlement service to settle atomically with an external ledger, including one that uses distributed ledger technology. Atomic means both sides of a transaction happen together, or neither does. The Bank is providing a Synchronisation Lab, and it is committed to a live service in 2028.

Project Meridian Securities was published on 28 Nov 2025. It reports experiments by the Bank of England, with technical advice from the BIS Innovation Hub's London centre. The experiments used a stand-in for the settlement system and a simulated platform for tokenised securities, not the Bank's live service. They showed that a synchronisation interface can arrange atomic settlement in central bank money for tokenised securities recorded on an external distributed ledger.

The report said the Bank hoped to make a live synchronisation service operational in 2027. A later page says 2028. Central securities depositories that settle in central bank money already settle securities. The experiments did not replace that.