HM Treasury has published a consultation proposing legislative changes to the UK framework for managers of Alternative Investment Funds (AIFMs) and relevant depositories, aimed at streamlining the current assimilated-law regime while retaining core consumer and market protections. The proposals would also remove detailed, firm-facing requirements from legislation to support the UK’s model of delegating granular rulemaking to the Financial Conduct Authority (FCA), alongside a parallel FCA Call for Input on how the detailed rules could be redesigned. Key proposals include removing the statutory assets-under-management thresholds that underpin the existing “Small Regimes”, to allow the FCA to set proportionate requirements across AIFMs based on size, activities, investor base and risks. HM Treasury is also consulting on removing the Small Registered Regime, which would bring currently registered sub-threshold managers into the regulatory perimeter and could require FCA authorisation for managers of unauthorised property collective investment schemes and internally managed investment companies. For listed closed-ended investment companies, the government proposes keeping them in scope of AIFM regulation, including internally managed listed entities below the current threshold, while noting the FCA’s intention to streamline duplicative requirements. Additional areas under consideration include moving key perimeter definitions into the Regulated Activities Order, broadly restating the National Private Placement Regime in legislation, removing the 20-working-day pre-marketing notification for marketing to professional investors, reconsidering private equity control-acquisition notifications, and reviewing statutory liability for external valuers. The consultation is open for nine weeks and closes on 9 June 2025. After considering responses, HM Treasury plans to publish a draft statutory instrument for feedback, with the FCA expected to consult on its proposed AIFM rules.

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