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In , the Financial Conduct Authority (FCA) adds an extra level of granularity to its plans for the cryptoasset regulatory regime, aiming to avoid edge cases and provide clarity for affected entities.

The centerpiece of the  concerns changes to the Perimeter Guidance Manual (PERG) within the . Its purpose is to provide guidance on the circumstances in which authorisation is required, and on the activities that are regulated under the act, including where exclusion may apply.

The regulator is aiming to prioritise substance over form, and warns that sector terminology such as “exchange,” “custody” or “broker” will not shield firms from regulation if their underlying activity is regulated.

Key perimeter determinants

In the paper, the FCA recommends that firms use a five-question framework to determine if they fall within the perimeter, covering activity type, location, business status and available exclusions. 

The extent of the perimeter has three key features:

• For safeguarding (Article 9N), the boundary is defined by the “requisite degree of control”. This means that if a firm can initiate a transfer, even via holding private keys or while contractually promising not to exercise technical control, it is likely within scope.
• The FCA has narrowed the interpretation of arranging (Article 9Y), and a critical test for interfaces and platforms is whether they provide the “means by which a user can place orders”. Although services “peripheral” to trading may remain outside, consumer-facing APIs must be assessed on a fact-specific basis.
• Under , the FCA is stretching its reach by deeming overseas firms serving UK consumers to be operating in the UK, regardless of their physical location. This excludes firms dealing solely with UK institutional clients, which will not be required to be authorised, unless said institutional clients are acting as intermediaries between the overseas firm and UK consumers.

A key clarification concerns dealing as principal (Article 9T). Under the proposed Article 9U exclusion, if there is no “holding out”, meaning a firm does not represent itself as willing to trade generally and continuously, authorisation may not be required. 

This offers some relief to private individuals, although the FCA has strategically kept quiet on larger entities such as prop desks to retain regulatory discretion.

Perimeter analysis to the fore

If the FCA’s plans are implemented as outlined in the consultation paper, they will likely provide welcome certainty for major players, but create significant hurdles for smaller firms and start-ups.

With the application gateway opening on September 30, 2026 and closing on February 28, 2027, firms have a narrow window to professionalise their governance, and perimeter analysis is set to become a key feature of doing business in the UK crypto market.

The FCA has emphasised that the cryptoasset regulations include a range of activity-specific exclusions and other modifications designed to reflect the distinct nature of newly regulated cryptoasset activities. Firms should not assume that exclusions applicable to existing regulated activities will apply in the same manner, if at all, to regulated cryptoasset activities.

Given the FCA's focus on substance over form, firms will need to carefully consider the distinction between peripheral technical services and providing the means to place orders, and determine just where their activity sits.