The Financial Conduct Authority (FCA) has proposed new plans to reform its regime for alternative asset managers.

According to the regulator, a more streamlined and proportionate regime would make it easier for firms to operate globally, encourage effective risk management, and ensure consumers are appropriately protected.

UK asset managers manage £12.3trn in mainstream assets and £2trn in alternative assets, while private markets have also tripled 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.

The FCA has also indicated that where appropriate, it would replace those legal provisions in its rules, and that it is also considering changes to its existing AIFMD rules.

In collaboration with the Treasury, the FCA will consider creating bespoke regimes for investment trusts and for venture capital firms.

“We want rules, better tailored to UK investment managers,” commented interim executive director of markets at the FCA, Simon Walls. “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.”

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.

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