The FCA is proposing reforms to its regime for alternative asset managers to make it easier for firms to enter the market, grow, compete and innovate.
The regulator says a more streamlined and proportionate regime will make it easier for firms to operate globally, while encouraging effective risk management.
UK asset managers manage £12.3 trillion in mainstream assets and £2 trillion in alternative assets, with private markets tripling in size over the past decade.
Much of the UK’s asset management regulation is derived from EU legislation, including the alternative investment fund managers directive (AIFMD). The government is consulting on bringing into effect provisions that repeal AIFMD’s firm-facing legislative requirements. Where appropriate, the FCA will replace those legal provisions in its rules. It is also considering changes to its existing AIFMD rules.
In collaboration with the Treasury, the FCA is considering creating bespoke regimes for investment trusts and for venture capital firms due to those sectors’ distinct characteristics.
The FCA plans to consult on detailed rules in the first half of 2026 subject to feedback and to decisions by the Treasury on the future regime.
The approach is among the almost 50 actions to support economic growth that the FCA set out in a letter to the Prime Minister.
Simon Walls, interim executive director of markets at the FCA, said: “We want rules, better tailored to UK investment managers. These could allow them to operate more efficiently, further supporting competition, competitiveness and economic growth.
“It’s part of our wider work to streamline the regulatory regime for asset managers, to support the continued competitiveness of our world-leading financial services as outlined in our new strategy.”
