The FCA has published CP26/28: The UK AIFM Regime, proposing a comprehensive reform of the UK’s regulatory framework for Alternative Investment Fund Managers (AIFMs). The consultation is part of a broader post-Brexit review of the UK asset management regime and aims to create a more proportionate, growth-focused framework while maintaining high standards of investor protection and market integrity.
The UK alternative asset management sector oversees almost £2 trillion in alternative assets and more than £16 trillion in total assets under management, making it one of the world’s largest markets. The FCA believes the current AIFMD-derived regime has become overly complex and no longer adequately reflects the diversity of firms operating in the sector.
Key Proposals
The FCA proposes:
- Replacing the current full-scope and small-authorised AIFM classifications with a more proportionate three-tier model;
- Applying regulatory requirements according to the size and risk profile of firms;
- Simplifying rules on governance, valuation, liquidity management, leverage, delegation and disclosures;
- Eliminating much of the retained EU legislation and moving requirements into an FCA sourcebook tailored to UK markets; and
- Retaining the UK private placement regime for non-UK fund managers marketing into the UK.
Current Regime vs Proposed Regime
| Area | Current AIFM Regime | Proposed AIFM Regime |
| Firm categorisation | Full-scope and small-authorised AIFMs based largely on AUM and leverage thresholds | Small, Medium and Large AIFMs based on Net Asset Value (NAV) |
| Small firm threshold | Generally below €100m leveraged or €500m unleveraged AUM | Small AIFM with NAV below £750m |
| Mid-tier category | None | Medium AIFM: £750m to £5bn NAV |
| Large firm category | Full-scope AIFMs | Large AIFM: above £5bn NAV |
| Regulatory approach | Broadly one-size-fits-all AIFMD framework | Proportionate requirements based on firm size and risk |
| Registered AIFMs | Registration regime available for certain firms | Most registered AIFMs expected to become authorised firms |
| Rule framework | Largely EU AIFMD-derived | New UK-specific FCA framework and sourcebook (ALTS) |
| Overseas marketing | UK Private Placement Regime (NPPR) | NPPR broadly retained with limited changes |
| Reporting | Existing AIF001/AIF002 Annex IV-style reporting | Transition to the new FRAME reporting regime (see CP26/26) |
What This Means for Firms
For larger managers, the proposals could result in a more tailored supervisory framework with reduced administrative burden. Smaller managers may benefit from clearer and more proportionate requirements, although many firms currently operating under registration-only arrangements may face increased authorisation and governance obligations.
The FCA expects the reforms to support international competitiveness while ensuring appropriate safeguards remain in place for investors and markets.
Next Steps
The consultation closes on 14 October 2026, with final rules expected during 2027 and implementation anticipated in 2028, alongside related reforms to remuneration and reporting requirements.
CP26/28 represents the most significant reform of the UK AIFM regime since AIFMD was introduced in 2013. The proposed shift from an EU-derived, one-size-fits-all framework to a UK-specific, tiered regime is designed to reduce complexity, improve proportionality and strengthen the UK’s position as a global asset management centre.
How Complyport Can Help
Complyport can support your firm through:
- Gap analysis and impact assessments against the proposed UK AIFM regime;
- Regulatory scope and categorisation reviews to determine how the new framework applies to your business;
- Governance, compliance and operating model assessments;
- Consultation response and implementation support; and
- Ongoing compliance advice and regulatory change management.
Contact Us
To understand how the proposed AIFM reforms may impact your firm, or to discuss how Complyport can support your preparations for the new regime, arrange a meeting with one of our Subject Matter Experts.
Ask ViCA, your Virtual Compliance Assistant. Claim your complimentary 20 queries today: https://vica.chat
