On 7 April 2025, HM Treasury published an Alternative Investment Fund Managers Regulations consultation and the FCA published a Call for Input: Future regulation of alternative fund managers. The consultation and call for input both close on 9 June 2025.
Following the UK’s decision to leave the EU, the Government transposed the body of EU legislation that applied directly in the UK at the point of exit onto the statute book. This included the Alternative Investment Fund Managers Directive (AIFMD). HM Treasury are proposing to bring into effect provisions to repeal AIFMD’s firm-facing legislation. Where appropriate, the FCA will replace the relevant legal provisions in their rules. .
HM Treasury's consultation sets out the Government’s proposed approach for a streamlined framework for the regulation of Alternative Investment Fund Managers (AIFMs), and the depositories they use. The FCA's Call for Input indicates its approach to regulating AIFMs within the framework proposed by the Government.
The Government proposals include:
- removing the legislative thresholds for the Small Regimes.
- requiring managers of sub-threshold Unauthorised Property Collective Investment Schemes to seek FCA authorisation, as managers of AIFs.
The FCA proposes to introduce a proportionate tiered rules regime, which would apply the rules to AIFMs based on their size, scope of activities, and the associated risk profile of the AIFs that they manage.
The FCA recognises that professional and sophisticated investors may not require the protections afforded by the current depositary regime. Although, it does not intend to make material changes to the depositary rules for large and medium sized AIFMs.
AREF is please to see that the Government are proposing to remove the legislative/legal liability on external valuers for any losses caused by the valuer being negligent or intentionally failing to perform its tasks. The external valuer would have contractual liability to the AIFM and in turn, the AIFM would have legal liability to the fund and its investors. AREF has been campaigning for the removal of unlimited liability for valuers ever since AIFMD was implemented (see AREF's AIFMD webpage for more information on this). We will continue to support the removal of this requirement by the EU as well as in the UK.
AREF's Public Policy Committee will be overseeing AREF's response to the consultation and call for input. AREF will be liaising with other associations to ensure we are aligned in our response.
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