CP26/36 sets the tests for new cryptoasset exclusions

CP26/36 is the Financial Conduct Authority's consultation on draft Perimeter Guidance for exclusions in the Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026, ahead of the October 25, 2027 start of the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

The consultation opened on October 21, 2026 and closes on November 18, 2026. Paragraph 1.14 says final guidance will be published in spring 2027. The FCA landing page says January 2027. Proposed Perimeter Guidance (PERG) 18.6.6 says temporary safeguarding to facilitate settlement is unlikely to require longer than 24 hours from the point the requisite control exists. The sections below compare the exclusions and record what CP26/36 does not state.

Key facts

• Opened October 21, 2026; closes November 18, 2026. Reply via the online form or cp26-36@fca.org.uk (FCA landing page; CP26/36, Chapter 7).
• The Cryptoassets Regulations are SI 2026/102. The draft says they, and the amending regulations, come into force in full on October 25, 2027. The amending instrument number is an editor's note (SI 2026/102; Appendix 1).
• Paragraph 1.14 says final guidance in spring 2027. The landing page says January 2027. This article follows the PDF.
• Applications opened on September 30, 2026 and close on February 28, 2027. In-window filings that seek the savings provision are expected to be determined before October 25, 2027 (paragraphs 1.15 and 1.16).
• Annex 1 asks 14 questions. The FCA says it can interpret the perimeter, not change it. Proposed PERG 18.6.6 reads temporary settlement safeguarding as unlikely to exceed 24 hours.
• No cost benefit analysis. Sections 138I, 139A and 139B of the Financial Services and Markets Act 2000 (FSMA) are cited. Annex 2 identifies only familiarisation costs.

How this reading of CP26/36 was put together

The sources are the FCA landing page for CP26/36, first published on October 21, 2026, and the PDF, including Appendix 1, read on October 22, 2026. The scope is the United Kingdom. CP26/36 cites no foreign statute, and none is added here. Paragraph 1.6 says the amendments should be read with existing guidance in the Perimeter Guidance manual (PERG) at PERG 18. The landing page points to September 2026's PS26/18, which Industry Spread covered in FCA PS26/18 leaves crypto front-ends waiting on Article 9Z2A. The landing page also links GC26/7, a same-day consultation on decentralised finance, which is not analysed here. Guidance commencement is printed as "[date 1]" and "[date 2]", so October 25, 2027 is not treated as the start of the guidance. Paragraph 1.14 says spring 2027. The landing page says January 2027. The PDF is followed.

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What the draft exclusions actually say

From October 25, 2027, paragraph 1.1 says, a person who carries on a regulated cryptoasset activity by way of business in the UK needs FCA authorisation unless exempt. Proposed PERG 18.1.17 restates section 19 of FSMA. A person is a natural person, a body corporate or an unincorporated association. Software and a smart contract are not. Decentralisation is not defined in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544), and it is not a separate test. "DAO" and "true DeFi" are not statutory concepts either.

A UK qualifying stablecoin, in the draft guidance in CP26/36, is a qualifying stablecoin issued within the scope of article 9M of the Regulated Activities Order by a person who has Part 4A permission for that activity. The same person can also issue other qualifying stablecoins. The distinction matters because several exclusions apply only to the UK qualifying stablecoin, not to an overseas stablecoin and not to a stablecoin issued outside article 9M. PERG 18.5.7 and PERG 18.6.14 read articles 43A and 9QB as taking backing-asset arrangements for a UK qualifying stablecoin out of article 40 and out of the article 9N safeguarding activity. PERG 18.6.13 reads article 9QA as doing the same where a UK qualifying stablecoin is held temporarily for a payment transaction. Article 9Z10A(1) then takes specified transfers and exchanges of a UK qualifying stablecoin out of dealing and arranging. Those limbs do not, on the draft text, extend to a qualifying stablecoin that is not a UK qualifying stablecoin.

Article 9Q excludes temporary article 9N safeguarding where a qualifying cryptoasset, or a relevant specified investment cryptoasset, is held only to settle a transaction already made. "Temporarily" is undefined. PERG 18.6.6 reads it as unlikely to exceed 24 hours from the point the requisite control exists. Article 9QA is only a UK qualifying stablecoin with an order for onward transfer. Articles 43A and 9QB cover backing assets of a UK qualifying stablecoin only, and they leave CASS 16, commencing October 25, 2027. Article 9R(4) is narrower than article 9O: a recognised central securities depositary (CSD), including a third-country CSD, and only with the article 9R(4)(b) undertaking.

Article 9Z10A(2) blocks the dealing exclusion where the coin must come back. The FCA reads that as lending or borrowing and points to PERG 18.9 without restating it. Article 9Z10A(4) does not apply where the transferor is a consumer under article 9N(5)(a). The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) makes issuing a qualifying stablecoin a controlled activity. Chapter 5 heads own-account dealing as article 9T and puts market making on a qualified cryptoasset trading platform (QCATP) in the second part of article 9UA. Paragraph 1.3 says "qualified"; Annex 4 says "Qualifying". Industry Spread has looked separately at when acting as principal becomes an FCA permission, not an entitlement. CP26/36 is an exclusion from that permission, not a reform of it. PERG 18.4.5B, an earlier commitment rather than a reading of the new instrument, says article 88F(4)(b) and regulation 3ZA(1) of the Electronic Money Regulations mean a product cannot be both a qualifying stablecoin and electronic money.

How the CP26/36 exclusions differ from each other

CP26/36 does not compare the United Kingdom with another jurisdiction. Paragraph 1.3's five examples are examples, not a closed list. The draft adds central securities depositaries and splits dealing into a payment limb and a collateral limb. Regulation 14A of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 is not among the exclusions. CP26/36 states no monetary penalty.

Sources: CP26/36, Chapters 3 to 6 and Appendix 1, and the FCA landing page, first published on October 21, 2026 and read on October 22, 2026.

Articles 9QA, 43A, 9QB and 9Z10A(1) attach to a UK qualifying stablecoin. Article 9Z10A(4) widens only for collateral. Only article 9Q uses the 24-hour view. Article 9QA does not repeat it.

Article 9Z2A, as CP26/36 proposes to explain it at PERG 18.8.25 to PERG 18.8.35, excludes only arranging deals in qualifying cryptoassets under article 9Y. The provider must be neither an authorised person nor a payment service provider, and must merely provide a technical service that lets another person access services of a third person or access a decentralised protocol. On the third-person route, that person must be carrying on the relevant regulated activity as an authorised or exempt person. A decentralised protocol need not itself be a person, and the term is not defined in the legislation. The draft says the exclusion is not a general carve-out for services described as technological, technical, software-based or connected with decentralised finance, and that it does not extend to dealing. CP26/36 also records that the exclusion has not been copied into the financial promotions regime and does not extend to Regulation 14A of the Money Laundering Regulations. Question 14 asks whether that reading is right.

PERG 18.8.30 says article 9Z2A does not use the word "discretion", and that an HM Treasury explanatory memorandum is an aid, not the test. PERG 18.1.20 sets no deterministic test of "true DeFi".

"The exclusion is intended to ensure that these technical service providers do not need permission for arranging deals in qualifying cryptoassets, while services that are not technical services or which go further than merely providing access to the services of a third person or to a decentralised protocol remain within scope."

— Financial Conduct Authority, CP26/36, Chapter 6, paragraph 6.2 (FCA consultation paper CP26/36)

What section 19 requires when CP26/36 states no penalty

CP26/36 names no enforcement action, case number, final notice or monetary penalty. Annex 2 says this is guidance under section 139A, not rules requiring the section 138I cost benefit analysis, and it states no fine. The consequence it cites is authorisation under section 19. Missing the condition for article 9Q, 9QA, 9QB, 43A, 9R(4), 9Z10A, 9T, 9UA or 9Z2A can leave the underlying activity in place. Paragraph 1.11 calls success better applications and fewer firms left on the savings provisions. The FCA sets no numeric target.

Section 21 of FSMA is not switched off by article 9Z2A. An invitation or inducement still needs an authorised person or another exemption. Article 73ZAA is limited to specified stablecoin communications. Regulation 14A, which paragraph 1.16 also calls Money Laundering Regulation 14A (MLR4A), remains. Industry Spread has covered that 2017 regime in Annex 1 registration is now an FCA gate, not a formality. Annex 3 cites section 1B(5)(b) on financial crime and mentions PS26/13 without summarising it. Proposed PERG 18.3.1A says overseas elements do not themselves take activity outside the UK, and it points to section 418.

"In responding to these questions, please bear in mind that the FCA does not have the power to change the perimeter, only to interpret it."

— Financial Conduct Authority, CP26/36, Annex 1 (FCA consultation paper CP26/36)

What this means for firms, venues and advisers

The landing page addresses firms active after October 25, 2027, FSMA firms that may need a variation, CSDs and advisers. It does not name fund managers, and the PDF builds no fund-manager regime. Articles 43A and 9QB leave CASS 16 in place from October 25, 2027. A payment service provider cannot use article 9Z2A. PERG 18.8.33 says a firm whose other activities sit under exclusions may. Article 9Q does not remove operation of a qualifying cryptoasset trading platform.

The application period opened on September 30, 2026 and closes on February 28, 2027. A firm registered under Money Laundering Regulation 14A that applies inside it can continue until the application is determined. The FCA expects to determine those savings applications before October 25, 2027. Dual regulated firms are told to engage the Prudential Regulation Authority (PRA) and may use the pre-application support service. Industry Spread reported that window when the FCA cryptoasset gateway opened against a February 28 deadline. The landing page, not the PDF, says: "We acknowledge that the timing of the publication of this latest Statutory Instrument will have created uncertainty for a small number of firms around the need to be authorised." Extra time on the arranging permission is a webpage statement, not Handbook text.

What is still open before October 25, 2027

Responses close on November 18, 2026, by the online form in Chapter 7, by email to cp26-36@fca.org.uk, or by post to the Cryptoasset Policy Team, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN. Chapter 7 links the FCA privacy notice. Paragraph 1.14 says final guidance will be published in spring 2027. The landing page says the aim is January 2027. Neither text explains the gap. This article follows the paper.

Inside the PDF, the instrument date, both commencement dates and the amending statutory instrument number are placeholders. The editor's note still dates SI 2026/102 and the Miscellaneous Amendments Regulations to October 25, 2027 in full. The open terms are "temporarily", "merely", "technical service", "decentralised protocol" and "providing a service". Annex 2 records no cost benefit analysis. None of this adds an exclusion.

TL;DR

CP26/36 consults on draft Perimeter Guidance for exclusions added by the Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026. SI 2026/102 is stated to come into force on October 25, 2027. The consultation opened on October 21, 2026 and closes on November 18, 2026. The paper puts final guidance in spring 2027; the FCA webpage says January 2027, and this article follows the paper. The carve-outs cover temporary settlement, payment holding and backing assets of a UK qualifying stablecoin, certain CSD arrangements, specified stablecoin dealing and collateral, own-account trading and QCATP market making, and mere technical access under article 9Z2A. Proposed PERG 18.6.6 says temporary settlement safeguarding is unlikely to exceed 24 hours from the point control exists. Article 9Z2A does not switch off dealing, section 21 of FSMA or Regulation 14A. CP26/36 names no penalty.

FAQ

When does the regime that CP26/36 interprets come into force?

The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, SI 2026/102, introduce the new activities from October 25, 2027. The draft says the statutory amendments come into force in full that day. The guidance instrument is separate. Its dates are printed as "[date 1]" and "[date 2]", so CP26/36 does not state when the Perimeter Guidance text starts. From the regime date, paragraph 1.1 requires authorisation for a regulated cryptoasset activity carried on by way of business in the UK, unless an exclusion or exemption applies.

What does CP26/36 mean by a UK qualifying stablecoin?

PERG 18.4.5A says it is a qualifying stablecoin issued by someone with permission to issue a qualifying stablecoin, and issued inside that activity. The definitions table requires Part 4A permission and issue within article 9M. A coin issued outside article 9M is not a UK qualifying stablecoin even if the issuer holds the permission, and the same firm can issue both. Articles 9QA, 43A, 9QB and 9Z10A(1) are tied to the UK qualifying stablecoin, not to every qualifying stablecoin. An overseas stablecoin does not inherit those limbs on the text CP26/36 published on October 21, 2026.

Does article 9Z2A take decentralised finance outside the perimeter?

No. Chapter 6 and PERG 18.8.25 to PERG 18.8.35 read article 9Z2A as an exclusion from arranging under article 9Y only. It does not cover dealing, and it is not a general exclusion for services described as technological, software-based or connected with decentralised finance. The provider must not be authorised or a payment service provider, and must merely give access to a third person's relevant activity or to a decentralised protocol. Neither that protocol nor "true DeFi" is defined, and the FCA says it has set no deterministic test. Question 14 asks whether the reading matches the legislation.

How long can temporary settlement safeguarding last?

Article 9Q covers safeguarding that is temporary and that settles a transaction already entered into. "Temporarily" is not defined. Proposed PERG 18.6.6 says this is unlikely to require longer than 24 hours from the point the requisite control exists. Dealing as principal and operating a qualifying cryptoasset trading platform stay inside. Article 9QA, for a UK qualifying stablecoin in a payment, uses a different clock: no longer than necessary to execute an onward order. It does not repeat the 24-hour figure.

Does the backing-asset exclusion remove CASS 16?

No. PERG 18.5.7 and PERG 18.6.14 say articles 43A and 9QB can mean the issuer needs no separate article 40 or article 9N permission over backing assets of a UK qualifying stablecoin. Both say that does not remove the safeguarding rules for those assets, which commence on October 25, 2027 at CASS 16. The exclusion does not apply to another qualifying stablecoin, and it does not exclude safeguarding of the coin itself. The draft also points to paragraph 6(4A5) and paragraph 7A(10B) of Schedule 1 to the Financial Promotion Order for parallel points in the promotions regime.

Why do the webpage and CP26/36 disagree on the final-guidance date?

They state different dates and neither explains the difference. Paragraph 1.14 says final guidance will be published in spring 2027. The landing page, first published on October 21, 2026, says the aim is January 2027. November 18, 2026 and October 25, 2027 match in both texts. This article follows the PDF because that is where the draft guidance and the 14 questions sit. The forbearance wording on technical-services applications is on the webpage and is not repeated in the PDF. Nothing in either document ranks one date above the other in a later correction.

This article is informational analysis only and does not constitute legal, regulatory, tax, or investment advice. Regulatory frameworks change frequently and interpretation depends on facts and circumstances; primary documents and official regulator guidance always supersede summaries. Firms should consult qualified legal counsel and their relevant supervisory authority before taking any action based on the analysis above.