Updating and improving the UK asset management regime

Modernising the COLL regime to suit current and possible future requirements of UK funds is an important initiative. It is some time since Discussion Paper 23/2 was issued in February 2023 setting out plans for updating and improving the UK regime for asset management. Thankfully, we do now have a few specific initiatives taken forward, hidden within the FCA's Quarterly Consultation CP23/25 issued in December 2023.

This Consultation Paper contains a set of proposals covering some of the more straightforward themes for changes and rules agreed to be modernised or clarified.  The proposals within CP23/25 are only a tentative start on a more radical agenda.  It proposes some initial easy wins, with the promise of more to come.

Whilst the proposals within CP23/25 are in the main welcome, we await with keen interest 

• a consultation on amending the AIFMD regime and re-evaluating the AIFMD Rules for non-UCITS retail schemes (expected in 2024) and in 2025 a review of the regulatory reporting regime; 
• an update on the regime for retail funds and whether non-UCITS retail funds should be rebranded to help rationalise the regime; and
• further proposals on supporting technological innovation.  We have a blueprint for the first stage of fund tokenisation but further work on tokenisation and use of AI is underway.  The FCA is also building capacity to support other innovation including the Direct2Fund proposal that they acknowledge could make the fund dealing model more attractive and interactions with investors far more efficient.

Thankfully the FCA is indicating that it intends to take a proportionate regulatory approach – first in relation to a firm's size but also that there will be a sensible and proportionate sequencing and management of an intensive multi-year reform agenda. 

Read the full briefing paper by Kirstene Baillie, Partner, Asset Management and Investment Funds, Fieldfisher LLP here.