The Financial Conduct Authority has opened a consultation on changes to its fund asset registration and custody rules aimed at keeping authorised Alternative Investment Funds able to invest in private markets assets such as real estate, infrastructure and partnership vehicles. The core proposal would let depositaries of authorised AIFs managed by full-scope UK Alternative Investment Fund Managers delegate registration or custody functions for assets that are not AIF custodial assets, so they would no longer have to hold legal title or partner status themselves in cases where that now creates ancillary legal, financial and reputational risks. For assets that are neither safe custody investments nor AIF custodial assets, principally immovables and some partnerships, delegation of the COLL registration function would be limited to affiliates of the authorised fund manager, with extra safeguards including trust arrangements, recordkeeping, restrictions on title transfers and changes of control without depositary consent, and external legal advice. For UK land and buildings, the delegate would also need to be a UK company subject to the Companies Act 2006. For assets that are safe custody investments but not AIF custodial assets, the depositary could delegate custody under CASS 6 to a regulated third party. The package also proposes to align the position for authorised AIFs managed by small UK AIFMs, clarify how COLL and CASS 6 interact, confirm that a UCITS manager cannot act as a depositary delegate, and replace an existing Modification by Consent on guarantees and indemnities for non-UCITS retail schemes acquiring immovables with permanent rules. Comments are invited by 9 July 2026. The FCA says it will consider feedback and, subject to responses, aims to proceed with the changes at the earliest opportunity, ahead of broader planned reviews under the AIFMD and UCITS repeal and replace process.
Financial Conduct Authority2026-05-21
Financial Conduct Authority consults on new delegation rules for authorised AIF depositaries to preserve private market investment
The Financial Conduct Authority has opened a consultation on changes to fund asset registration and custody rules to allow depositaries of authorised Alternative Investment Funds to delegate registration or custody of non‑AIF custodial assets, reducing risks while maintaining safeguards. Proposals include limiting delegation of registration for immovables and some partnerships to affiliates of the authorised fund manager with additional controls, permitting delegation of custody of certain safe custody investments under CASS 6 to regulated third parties, aligning rules for authorised AIFs managed by small UK AIFMs, clarifying the interaction of COLL and CASS 6, and replacing a Modification by Consent on guarantees and indemnities for non‑UCITS retail schemes acquiring immovables with permanent rules.