International Funds Focus Quarterly | July 2025
Published on 10th July 2025
UK regime for asset management takes two steps forward with private fund manager rules and regulatory capital proposals
What the last quarter's funds updates have lacked in quantum has been made up in quality.
The Financial Conduct Authority (FCA) as part of its drive for reform is in the midst of a longer workstream to improve asset management regulation by adopting a more modern approach tailored to the specific needs of the UK. The regulator first set out its priorities for the future of the UK asset management in a speech to the Investment Association in October 2023 that prioritised three areas of reform: changing the rules that govern private investment funds, updating the UK's retail funds regime and supporting technological innovation.
The FCA has published detailed information subsequently on how it views implementing the first priority proposals for changes to retain the core framework of the Alternative Investment Fund Managers Directive (AIFMD) while making it more proportionate. The regulator put out a call for input on the 7 April this year and, in conjunction with this HM Treasury, has published a consultation on regulations for alternative fund managers.
The EU has also finalised significantly different amendments to their AIFMD regime that will come into force in April 2026. These will not be transposed into UK law: as a result, regulation of private funds in the UK and the EU will diverge in the future.
In an additional step towards a more proportionate regime, the UK financial regulator has proposed a simplification of UK capital rules for investment firms.
Osborne Clarke's investment management, fund formation and regulatory experts are well placed to advise you further on any of the rapidly changing developments covered in this edition of our International Funds Focus.
For further information please contact the experts mentioned in the articles or one of our funds partners: Helen Parsonage, Tim Simmonds, Alison Riddle, Simon Thomas and Robert Eke.
A new regime arrives for UK private fund managers
HM Treasury and the FCA have unveiled a transformative regulatory framework for UK fund managers. What are its main features, what does it mean for fund managers and what's to be addressed to ensure its future success?
The new framework aims to reduce regulatory burdens while maintaining essential protections for consumers and market integrity. The proposals replace the legacy rules derived from the EU's AIFMD and introduces dynamic thresholds based on the size and activities of firms.
The new regime's direction offers significant opportunities for some stakeholders; however, some challenges remain and require further clarification. Our experts explore the new regime in detail.
FCA has proposed a simplification of UK capital rules
A consultation has begun regarding the definition of capital for investment firms, outlining plans to simplify and consolidate the rules on what qualifies as regulatory capital and to make these easier to understand.
The proposals are in line with the UK financial regulator's broader aims to make rules more accessible and proportionate, avoid unnecessary complexity and support the government's growth "mission".
