{"id":1875,"date":"2025-06-25T10:07:40","date_gmt":"2025-06-25T10:07:40","guid":{"rendered":"https:\/\/iqeq.com\/gb\/insights\/key-takeaways-from-the-fca-and-hm-treasurys-proposed-reforms-to-the-uk-aifm-regime\/"},"modified":"2026-02-24T10:32:33","modified_gmt":"2026-02-24T10:32:33","slug":"key-takeaways-from-the-fca-and-hm-treasurys-proposed-reforms-to-the-uk-aifm-regime","status":"publish","type":"post","link":"https:\/\/iqeq.com\/gb\/insights\/key-takeaways-from-the-fca-and-hm-treasurys-proposed-reforms-to-the-uk-aifm-regime\/","title":{"rendered":"Key takeaways from the FCA and HM Treasury\u2019s proposed reforms to the UK AIFM regime\u00a0"},"content":{"rendered":"
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By Feeras Juenda, Compliance Consulting Analyst, and Andrew Shrimpton, Chair, UK Regulatory and Compliance Solutions<\/span><\/i>\u00a0<\/span><\/p>\n

On 7 April 2025, the UK’s Financial Conduct Authority (FCA) and His Majesty\u2019s Treasury (HMT) published a <\/span><\/b>Call for Input<\/span><\/b><\/a> (CFI) and an <\/span><\/b>open consultation<\/span><\/b><\/a> respectively regarding proposed reforms to the regulatory regime currently applicable to alternative investment fund managers (AIFMs) in the UK. The key proposals contained in these papers are summarised below.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

FCA seeks to improve UK competitiveness<\/h2>\n

With approximately \u00a314 trillion of total assets under management (AUM), the UK\u2019s asset management sector is second only in size to that of the United States. The existing UK AIFM regime is anchored in the European Union\u2019s Alternative Investment Fund Managers Directive (EU AIFMD), which was retained following the UK\u2019s departure from the EU and which has seen minimal divergence to date. In contrast, EU member states have until 16 April 2026 to transpose the new <\/span>AIFMD II<\/span><\/a> into national law.\u00a0<\/span>\u00a0<\/span><\/p>\n

The aim of the latest proposals is to streamline the UK\u2019s regulation of AIFMs and establish an approach that is proportionate to an AIFM\u2019s size and activities. The hope here is that, by making it simpler and cheaper for asset managers to conduct business in the UK (while maintaining high regulatory standards), the reforms would increase the UK\u2019s attractiveness as an asset management hub.<\/span>\u00a0<\/span><\/p>\n

Another aim is to create clearer rules that are better tailored to different firms, creating efficiencies in how UK firms can do business and further supporting economic growth and competition \u2013 for example by helping to channel investments into early-stage companies and infrastructure, boosting the long-term growth of the UK economy.<\/span>\u00a0<\/span><\/p>\n

This ties in nicely with the current UK government\u2019s growth agenda and the FCA\u2019s five-year strategy for 2025-2030, as well as the regulator\u2019s secondary international competitiveness and growth objective. Against this backdrop, the FCA has also <\/span>recently appointed Sarah Pritchard<\/span><\/a> as deputy chief executive, a newly created role to support this expanding remit.<\/span>\u00a0<\/span><\/p>\n

Key proposals<\/h2>\n

Under the current rules, AIFMs with AUM of more than \u20ac100m \u2013 or \u20ac500m for funds that are unleveraged and have no redemption rights for the first five years \u2013 are subject to the full-scope UK AIFM regime. In contrast, an AIFM below these AUM thresholds would be categorised as a sub-threshold AIFM and would accordingly be subject to fewer requirements.\u00a0<\/span>\u00a0<\/span><\/p>\n

The key proposals contained in HMT\u2019s consultation and the FCA\u2019s CFI seek to revoke the legislative thresholds and instead establish new regulatory classifications for UK AIFMs.<\/span>\u00a0<\/span><\/p>\n

A three-tiered approach<\/h2>\n

The proposed three-tiered approach to the regulation of AIFMs is as follows:\u202f\u202f\u202f\u202f\u202f\u202f\u202f\u202f\u202f\u202f\u202f\u202f\u202f<\/span>\u00a0<\/span><\/p>\n