FCA speech on updating and improving the UK asset management regime

FCA Chair Ashley Alder spoke earlier this month at the Investment Association’s annual dinner about the regulator’s priorities for updating and improving the UK asset management regime. The speech related to and followed on from the FCA’s discussion paper on the current regime that was issued earlier this year.

In his speech, Mr Alder identified three main priorities for reform, which are as follows:

1. First, the FCA is looking at making the regime for alternative fund managers more proportionate. Examples of where the FCA is considering making reforms, include making changes to:
   1. the current regime of having two different categories of manager (e.g. small authorised/registered AIFMs and full-scope AIFMs) and applying different rules to each of them. Instead, the new regime would operate proportionately depending on the nature and scale of a firm’s business.
   2. AIFMD requirements preventing full-scope AIFMs from carrying out other activities within the same legal entity.
   3. AIFMD notification requirements for newly established AIFs, material changes to AIFs, acquisitions/disposals of major holdings and control of non-listed companies.
2. Another area of potential reform related to updating the UK regime for retail funds. For example, the FCA is considering whether it could simplify the rules for non-undertaking for collective investment in transferable securities funds (or “NURS”). The FCA is also considering feedback on whether NURS funds might be rebranded.
3. The final area of reform related to supporting technological innovation. The FCA has been working with the Technology Working Group on a blueprint for fund tokenisation, which will be published later this year. The FCA will also be building extra capacity for other initiatives such as the Direct2Fund proposals.

In relation to next steps, the FCA will be consulting on amending the AIFMD regime and re-evaluating the AIFMD rules for NURS in 2024. It will then be reviewing the regulatory reporting regime in 2025.

For further UK financial services regulatory updates, please visit the Burges Salmon blog.