The UK Financial Conduct Authority issued a discussion paper on distributed ledger technology and seeks feedback through July 17. Although the FCA acknowledged that there is no single formal definition of DLT, it observed that DLT can be described “as a set of technological solutions that enables a single, sequenced and cryptographically-secured record of activity to be safely distributed to, and acted upon by a network of varied participants.” The FCA said that, while it is technology neutral, it seeks to understand through comments the risks and opportunities of DLT, and how use of DLT might be impacted by its regulations. Among other things, the FCA queried how a firm can demonstrate “appropriate outsourcing arrangements” when it relies on DLT and “what governance arrangements do firms plan to have in place when using applications on public, permissioned networks?”

Helpful to Getting the Business Done: The FCA discussion paper is quite thoughtful and provides an excellent primer for those trying to understand what DLT is. It will be interesting to see whether DLT would qualify as an approved storage medium under the Commodity Futures Trading Commission’s proposed revisions to its record-retention rules. (Click here for background on these proposed new rules in the article “New Records Retention Regime for 21st Century Proposed by CFTC” in the January 16, 2017 edition of Bridging the Week.)