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  • Draft SI and policy note to create new AIFM regime
    14 July 2026

    HM Treasury (HMT) has published a draft statutory instrument (SI), the Alternative Investment Fund Managers Regulations 2026, and accompanying policy note, setting out proposals to reform the UK regulatory framework for alternative investment fund managers (AIFMs) using powers from the Financial Services and Markets Act 2023 (FSMA 2023). The draft SI repeals and replaces key assimilated legislation governing AIFMs, transferring most firm-facing requirements from legislation to UK Financial Conduct Authority (FCA) rules. The FCA's consultation paper was published alongside the publication of the draft SI.

    The assimilated law being replaced by this instrument includes: (i) the Alternative Investment Fund Managers Regulations 2013; (ii) Commission Delegated Regulation (EU) No 231/2013; (iii) Commission Delegated Regulation (EU) No 694/2014; and (iv) Commission Delegated Regulation (EU) No 447/2013.

    The proposals include clarifying the definition of an AIF, removing existing legislative size thresholds for AIFMs, reforming the registration regime for smaller firms, exempting certain small, internally managed investment companies, maintaining the National Private Placement Regime (for overseas AIFMs and AIFs) while giving the FCA greater flexibility over reporting requirements for domestic and overseas funds in the UK, simplifying private equity disclosure obligations, and other minor changes to rationalise the regime with how the market functions. On remuneration, the current legislation, which sets out prescriptive remuneration requirements for AIFMs (and some MiFID firms), will be removed and the FCA will be given powers in the new legislation to institute a replacement remuneration regime for solo-regulated firms.

    The deadline for technical feedback on the draft SI is 14 October. HMT will consider feedback and set out a timeline for laying the final SI, which it expects in early 2027, subject to parliamentary time. The legislation will commence at the same time as the FCA makes new rules.

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    Topic: Fund Regulation