Find out about our minimum standards for cryptoasset firms and individuals including our Principles for Businesses, the Consumer Duty and the Senior Managers and Certification Regime (SM&CR).
On 30 June 2026, we published our final rules and guidance[3], which will apply to all cryptoasset firms who have been granted permission to operate under FSMA on or after 25 October 2027.
We have a series of standards that both financial services firms and individuals working at those firms need to adhere to. This page sets out a summary of some of those key minimum standards.
Threshold Conditions
The Threshold Conditions articulate the minimum standards that firms must satisfy. They are set out in Schedule 6[4] of the Financial Services and Markets Act 2000 (FSMA) and in broad summary are:
- Business model: A firm will need to satisfy us that its business model is suitable for the regulated activities that it wishes to undertake.
- Effective supervision: A firm must demonstrate that it is capable of being supervised effectively by the FCA.
- The location of offices: A firm that is a body corporate should have its head offices (and its registered office, if it has one) in the UK. This Threshold Condition is only applicable if the firm chooses to incorporate in the UK. There is further information on our website[5] for overseas firms.
- Appropriate resources: A firm must have the right people, financial resources and systems to deliver the products or service.
- Suitability: A firm must be fit and proper having regard to all the factors in Schedule 6[4] of FSMA.
Cryptoasset firms should consider familiarising themselves with the Threshold Conditions[6].
Fit and proper test
We also expect individuals who work at firms to meet our minimum standards which are set out in Part V[5] of FSMA and in broad summary are:
- Honesty, integrity and reputation: We will have regard to all relevant matters in assessing whether a person has the honesty, integrity and reputation to be approved, for example whether they have contravened regulatory standards or defrauded customers.
- Financial soundness: We will consider any factors, including whether the individual has been subject to any judgement debt that remains outstanding or was not satisfied within a reasonable period, or has filed for bankruptcy or been adjudged bankrupt
- Competence and capability: Whether an individual has the competence and capability to carry out their role at a firm, based on experience and necessary qualifications.
Cryptoasset firms should consider familiarising themselves with our expectations of individuals who work at financial services firms. In particular, cryptoasset firms currently registered with the FCA should note that the FSMA fit and proper requirements are broader than those under the MLRs.
High-level standards
The Handbook includes our high-level standards. These standards provide firms with a clear statement of the standards of behaviour we expect from authorised firms.
The key high-level standards are:
- Threshold Conditions (COND[6]): As above, these are the minimum conditions, set out in FSMA[7], which a firm is required to satisfy, and continue to satisfy, to get and keep its permissions. We provide guidance on these conditions in COND[9].
- Principles for Businesses (PRIN[5]): These are a general statement of the fundamental obligations that firms must comply with at all times.
- General Provisions (GEN[6]): This sourcebook sets out the general standards that apply to all firms, including statutory disclosure statements and use of the FCA name or logo.
- Fit and Proper test for Employees and Senior Personnel (FIT[7]): This sourcebook sets out our fitness and propriety requirements of individuals working in financial services.
- Training and Competence (TC[8]): This sourcebook sets out our requirements for financial firms to ensure their staff are properly qualified, competent, and supervised to carry out regulated activities.
- Systems and Controls (SYSC[9]): Our Senior Management Arrangements, Systems and Controls sourcebook (SYSC) sets out the organisational systems, controls and compliance arrangements that firms should have in place. It also explains how firms should organise and manage their affairs.
- Fees (FEES[10]): Our Fees Manual sets out the fees that regulated firms have to pay.
There are some high-level standards that apply to all firms we regulate and so will apply to cryptoasset firms. These include COND[11], PRIN[12] and GEN[13].
There are other high-level standards, particularly SYSC[16], where the application of the sourcebook depends on the activities a firm carries out and any other permissions it holds.
There will then be other sourcebooks that are specific to different types of firms. For example, we are proposing that cryptoasset firms will be subject to a new sourcebook (CRYPTOPRU[10]) which will set out the prudential standards we expect cryptoasset firms to adhere to.
As we develop the regime, our consultation papers will set out how we propose to apply the Handbook to cryptoasset firms and these proposals will be confirmed in our subsequent policy statements.
In the interim, cryptoasset firms should consider familiarising themselves with the Handbook[11].
Principles for Businesses
Our Principles for Businesses set out in simple terms the fundamental, high-level standards that all firms must comply with at all times. There are 12 Principles which are set out in the PRIN[19] sourcebook in our Handbook.
- Integrity: A firm must conduct its business with integrity.
- Skill, care and diligence: A firm must conduct its business with due skill, care and diligence.
- Management and control: A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.
- Financial prudence: A firm must maintain adequate financial resources.
- Market conduct: A firm must observe proper standards of market conduct.
- Customers' interests: A firm must pay due regard to the interests of its customers and treat them fairly.
- Communication with clients: A firm must pay due regard to the information needs of its clients and communicate information to them in a way which is clear, fair and not misleading.
- Conflicts of interest: A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.
- Customers: relationships of trust – A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.
- Clients' assets: A firm must arrange adequate protection for clients' assets when it is responsible for them.
- Relations with regulators: A firm must deal with its regulators in an open and cooperative way and must disclose to us appropriately anything relating to the firm of which that regulator would reasonably expect notice.
- Consumer Duty: A firm must act to deliver good outcomes for retail customers.
Cryptoasset firms should consider familiarising themselves with our Principles for Businesses.
Consumer Duty
Since its introduction on 31 July 2023, the Duty has set high standards of retail consumer protection across financial services. It encourages firms to go beyond narrow rule compliance and focus on delivering good outcomes for retail consumers, setting robust expectations that apply to the products and services offered to retail customers.
The Duty comprises:
- A consumer principle. Principle 12[11] sets out that firms must act to deliver good outcomes for retail customers.
- 3 cross-cutting obligations, which set out high-level standards of behaviour:
- A firm must act in good faith towards retail customers.
- A firm must avoid causing foreseeable harm to retail customers.
- A firm must enable and support retail customers to pursue their financial objectives.
- 4 sets of outcome rules setting more detailed requirements and expectations in the following areas:
- Products and Services – products and services must be designed to meet the needs, characteristics and objectives of retail customers in an identified target market and distributed appropriately.
- Price and Value – firms must ensure products and services provide fair value to retail customers, and take appropriate action where they identify that this is not the case.
- Consumer Understanding – firms must communicate in a way that supports customers’ understanding and equips them with the right information to make decisions that are effective, timely and properly informed.
- Consumer Support – firms must provide retail customers with the support they need throughout the lifecycle of the product or service.
We are still considering whether we apply the Duty to cryptoasset firms. We would like input on our options for securing broadly comparable outcomes for consumers in relation to regulated cryptoasset activities.
Senior Managers and Certification Regime (SM&CR)
The SM&CR aims to create clear accountability, promote personal responsibility and improve firms’ conduct.
We recently consulted on our proposal to apply all of the existing elements and rules of the SM&CR to cryptoasset firms. This approach would also involve applying all the relevant senior management functions, certification functions, prescribed responsibilities and conduct rules.
Further information
There is further information on our website[12]. Cryptoasset firms that think they will be within the scope of the new regime may wish to consider seeking independent legal/compliance advice as part of their preparations for the new regime.
