FCA Proposes Biggest Overhaul of UK AIFM Regime Since 2013
FCA publishes consultation on sweeping reforms to the UK's AIFM regulatory framework.
Why it matters: Fund managers, compliance counsel, and legal advisors must adapt to new rules shaping UK private fund regulation. The overhaul aims to simplify compliance and improve market integrity.
- FCA published Consultation Paper CP26/28 on July 14, 2026, proposing comprehensive AIFM reforms.
- The existing EU-derived AIFMD framework would be replaced with a new FCA Alternative Investment Funds sourcebook (ALTS).
- New rules introduce strategy-based leverage disclosure, uniform valuation standards across all AIFMs, and annual summaries for small AIFMs.
- Consultation closes October 14, 2026; full implementation is expected by 2028, with annual savings of £128 million for asset managers.
On July 14, 2026, the Financial Conduct Authority (FCA) launched Consultation Paper CP26/28, outlining the largest overhaul of the UK's Alternative Investment Fund Managers (AIFM) regime since 2013. The proposals would replace the existing EU-origin AIFMD framework with a bespoke UK alternative investment funds sourcebook (ALTS), designed to better fit the current market.
The FCA aims to protect consumers while making rules more proportional to firm size and activity. The overhaul includes significant changes such as substituting mandatory dual calculations of fund leverage with strategy-appropriate disclosures, ensuring transparency without undue burden. Valuation rules would now apply consistently to all AIFMs, including small managers who previously had limited valuation requirements. Instead of a full annual report, small AIFMs would prepare a simplified "annual summary." Additionally, delegation to third parties would shift to a post-notification model, enhancing flexibility.
Investor disclosures are set to be streamlined and clarified, differentiating professional from retail investors, improving the flow of relevant information. According to the FCA, these changes will save asset managers an estimated £128 million annually.
Consultation on CP26/28 ends October 14, 2026, with final rules anticipated following HM Treasury's statutory instrument. The FCA expects the new framework to be fully implemented by 2028, reshaping regulation for firms managing nearly £32 trillion in alternative assets within the UK’s asset management industry.
For more details, visit the FCA consultation paper CP26/28 and industry analysis from the National Law Review.
By the numbers:
- £128 million — estimated annual savings for asset managers from the streamlined rulebook
- £32 trillion — value of alternative assets managed by UK asset managers
- July 14, 2026 — date FCA published consultation CP26/28
Yes, but: The FCA has not yet detailed how the new rules will align with international standards or the impact on cross-border fund management.
What's next: The consultation period closes October 14, 2026, with final rules set to follow HM Treasury approval and full implementation anticipated in 2028.