Background

On 23 May 2024, Ashley Alder, the Chair of the UK Financial Conduct Authority (“FCA”), delivered a speech which outlined the regulator’s agenda for the asset management sector (the “Speech”). In particular, the Speech covered how regulation relates to the FCA’s new objectives for competitiveness and growth.

Key Points

The key points in the Speech included:

  • Smarter Regulatory Framework: The FCA are currently reviewing and potentially replacing European Union (“EU”) law including UCITS, AIFMD, and parts of MIFID. Initial feedback to the FCA’s discussion paper on the future of asset management (which we wrote about here) has indicated a desire to remain broadly aligned with EU law (particularly in relation to retail funds), but the FCA sees significant potential for more proportionate regulation for alternative managers.
  • Private Finance, Non-Bank Financial Intermediation (“NBFI”) and Valuations: Given the rapid expansion of global private finance, the FCA is thinking further about the tools / data needed to effectively supervise NBFI. In addition, the FCA is undertaking domestic supervisory work in relation to valuations and is co-leading a workstream on leverage in the non-banking sector for the global Financial Stability Board.
  • Retail Investments: The FCA welcomes the revocation of the PRIIPS Regulation and plans to consult on a new regime that is proportionate and tailored to the market / products in the UK, which allows firms to design a more engaging consumer journey.
  • Sustainability Disclosure Requirements (“SDR”): The FCA has aimed to create a system for confident investing in sustainable products, ensuring firms’ sustainability claims are genuine. International interoperability has remained a key priority and the FCA will continue to work with HM Treasury as it considers extending the disclosure and labeling regime to overseas funds. Please refer to our dedicated article on the SDR here.
  • Innovation: Fund tokenisation is a special area of focus for the FCA. The FCA are collaborating with the industry-led Technology Working Group of the UK Government’s Asset Management Taskforce, to develop models within existing frameworks and keep its regulations updated to support these innovations. Please refer to our dedicated article on fund tokenisation here.

Conclusion

As flagged in the Speech, the FCA will continue to advance its primary operational objectives and weigh up which of them could advance growth and competitiveness. Market participants should continue to monitor updates to the areas of focus flagged by the FCA. For further information, please reach out to the Proskauer UK Regulatory team. 

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Photo of John Verwey John Verwey

John Verwey is a partner in the Private Funds Group. John advises on a wide number of regulatory issues at a national UK and European level, including firm authorisations, appointed representative arrangements, change in control, market abuse. He represents a variety of clients…

John Verwey is a partner in the Private Funds Group. John advises on a wide number of regulatory issues at a national UK and European level, including firm authorisations, appointed representative arrangements, change in control, market abuse. He represents a variety of clients that range from small start-up fund managers to established global fund advisers and managers.

A particular area of focus for John is Alternative Investment Fund Managers Directive (AIFMD) and Markets in Financial Instruments Directive II (MiFID II).  This includes advising on pre-marketing and marketing strategies for fund managers, advising on the Level One and Lever Two requirements under AIFMD and implementing UK rules and legislation, and advising on the organizational and conduct of business requirements under MiFID II.

Photo of Rachel Lowe Rachel Lowe

Rachel E. Lowe is a special regulatory counsel in the Corporate Department and a member of the Private Investment Funds Group.

Rachel advises on financial services regulation specializing in sustainable finance and ESG regulation. She has particular expertise in drafting and advising on…

Rachel E. Lowe is a special regulatory counsel in the Corporate Department and a member of the Private Investment Funds Group.

Rachel advises on financial services regulation specializing in sustainable finance and ESG regulation. She has particular expertise in drafting and advising on the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation. Rachel has also supported with EU MiFID and AIFMD sustainability updates for clients, including from a governance and organizational perspective, as well as providing drafting and training support. She also advises on the Corporate Sustainability Reporting Directive (CSRD), including analysis of its applicability for large international group structures.

From a UK perspective, Rachel supports clients with the TCFD-related requirements in the Financial Conduct Authority’s ESG Sourcebook and is increasingly engaged on the UK’s Sustainability Disclosure Requirements (SDR).

More broadly, Rachel has worked with litigation colleagues to assist clients with understanding and mitigating greenwashing-related legal and regulatory risk.

Photo of Amar Unadkat Amar Unadkat

Amar Unadkat is a special regulatory counsel in the Corporate Department and a member of the Private Funds Group.

Amar advises on a variety of financial services regulatory and compliance matters both from a UK and European perspective. Amar regularly advises his clients…

Amar Unadkat is a special regulatory counsel in the Corporate Department and a member of the Private Funds Group.

Amar advises on a variety of financial services regulatory and compliance matters both from a UK and European perspective. Amar regularly advises his clients on issues relating to the Alternative Investment Fund Managers Directive (“AIFMD”), the second Markets in Financial Instruments Directive (“MiFID II”), as well as the latest ESG developments. Amar also focusses on UK regulatory compliance matters, including the FCA’s change of control regime, the appointed representative regime and the Senior Managers & Certification Regime.

Amar’s clients include private equity firms, investment managers and advisers, firms in the FinTech space, wealth management businesses, banks and sovereign wealth funds.

Photo of Sulaiman Malik Sulaiman Malik

Sulaiman Malik is an associate in the Corporate Department and a member of the Private Funds Group.

Sulaiman advises clients on a range of UK and international financial regulation. He advises private equity funds, hedge funds, sovereign wealth funds and other asset managers…

Sulaiman Malik is an associate in the Corporate Department and a member of the Private Funds Group.

Sulaiman advises clients on a range of UK and international financial regulation. He advises private equity funds, hedge funds, sovereign wealth funds and other asset managers, as well as banks, FinTechs, broker-dealers and governments.

Prior to joining Proskauer, Sulaiman trained at Simmons & Simmons in London, where he was seconded to Brevan Howard. He has also spent time at the UK’s Ministry of Justice and as an adviser to the Mayor of Brisbane, in Australia.

Sulaiman is a passionate advocate for diversity and inclusion. He previously worked at Rare, a market-leading diversity consultancy, and provides pro bono legal advice to a range of community and civil rights organizations.

Photo of Michael Singh Michael Singh

Michael is an associate in the Private Funds Group in the Corporate Department.

Michael advises clients on a variety of regulatory issues both from a UK and European perspective. He also helps clients on fund related transactions. His clients include private equity firms…

Michael is an associate in the Private Funds Group in the Corporate Department.

Michael advises clients on a variety of regulatory issues both from a UK and European perspective. He also helps clients on fund related transactions. His clients include private equity firms, investment managers, FinTech companies and wealth management businesses.

He is dual-qualified as a German lawyer (“Rechtsanwalt”) and Solicitor of England and Wales and previously was in-house counsel at Deutsche Bank.