If all things regulatory is your day job, read our industry-comprehensive roadmap for 2026. If you need to understand the headlines for the year ahead, read on.
AIFMS – some good news…
Hot off the press at the time of writing is the European Commission’s ‘Market Integration Package’ (MIP), a set of changes to existing EU rules to further integrate EU financial markets. When combined with AIFMD II (April 26) and potential new rules for retail business – there is a lot of upcoming change to digest.
Broadly, there is good news in the MIP for EU AIFMs. Here the changes would:
- consolidate and simplify the rules relating to marketing and pre-marketing, including reducing the requirement for prior notification of marketing communications;
- shorten processing times for marketing notifications and restrict member state gold-plating;
- streamline the process for delegating AIFM functions to other EU authorised group companies; and
- create a new ‘depositary passport’, allowing the appointment of a single EU depositary for AIFs managed by EU AIFMs.
A flagship proposal is to give ESMA new power to review how the largest EU AIFMs are supervised by their national regulators. The European Commission is keen to say that this does not make ESMA the regulator, but this could see ESMA exercising more influence.
More immediate change arrives on 16 April 2026 when AIFMD II comes into force. Key changes are:
- new rules for funds which originate loans including new leverage limits for funds categorised as ‘Loan Originating AIFs’;
- open-ended funds will have to comply with new rules on liquidity management; and
- there are enhanced disclosure and reporting requirements.
The changes will be particularly significant for open-ended funds and funds which originate loans but all EU full-scope AIFMs will be affected as well as non-EU AIFMs marketing under NPPRs.
The European Commission has also recently started to consult on the reform of EU venture capital and growth funds. This could see further changes to the AIFM regime, particularly for small and mid-sized AIFMs for which a more effective and proportionate regulatory approach is being considered.
Managing GP conflicts of interest – a deep dive by the UK’s FCA
The FCA is currently investigating how UK private markets firms identify, manage and mitigate conflicts of interest and this will be a priority for 2026.
Managers should already be clear about their conflict risks and have robust and up-to-date procedures in place (and should be confident that they are followed in practice). But once the results of the FCA’s review are out, firms will need to consider any new requirements or guidance as this is an area where we can expect FCA scrutiny.
Fund management – the UK landscape
The UK government and the FCA are proposing their own changes (quite different to those of the EU) to simplify the UK AIFMD regime. We are likely to see new thresholds for assessing when and how the rules apply; some changes to the types of additional business that AIFMs can do and the removal of certain of the notification requirements. There may be more tailored rules for specific business models such as venture capital and growth capital.
What’s clear is that we are going to see further divergence between the UK and EU regimes.
Also as part of the Labour government’s growth agenda, the UK is reviewing its client categorisation rules, looking at whether GPs should be allowed to “opt-up” additional types of investor to professional client status.
A start-up regime allowing firms to operate under a temporary lighter-touch regime in the early stages is also expected. This could allow new firms time to finesse their business models or secure additional fundraising before the full range of regulatory requirements apply. No specific timing for this has been given.
But it’s not just a roll-back of regulation. In the future, UK authorised firms which act as principal under an appointed representative arrangement will need a specific permission from the FCA to do so. The new framework is intended to improve principals’ oversight of their appointed representatives and so the FCA may set out some additional expectations to ensure this is the case.
What’s clear is that we are going to see further divergence between the UK and EU regimes over the coming years.
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Our analysis.
Click below for our detailed briefings
The EU’s Market Integration Package
Our full analysis of the MIP and what it means for GPs
Changes to the UK AIFMD regime
The UK may use (some) deregulation to promote growth – read our take on their proposals
Client categorisation consultation
Potentially good news for GPs looking to access private wealth channels, with this FCA consultation on ‘opting up’ investors
Many GPs have signed up to this code: the latest iteration has new nuance around its discussion of sustainability
New rules on retail distribution coming to replace PRIIPs
Appointed Representatives: new permissions from the FCA
An AR arrangement is a common structure for start-up GPs, but the FCA’s approach is changing
