HM Treasury has published draft legislation to replace the United Kingdom’s existing Alternative Investment Fund Managers regime with a framework that keeps the perimeter and key protections in legislation while shifting most firm-facing requirements into Financial Conduct Authority rules. The draft would simplify the regime for alternative investment fund managers, retain core consumer and market protections, and let the FCA design a more proportionate framework for UK markets, with HM Treasury stating that the majority of firms would face more streamlined requirements. The draft instrument would clarify the definition of an alternative investment fund, preserve depositary liability rules and the National Private Placement Regime, and keep Gibraltar firms broadly within the existing market access framework pending the Gibraltar Access Regime. It would also remove most legislative size thresholds and the broad small AIFM registration regime, except for managers of registered venture capital funds and social entrepreneurship funds, so that the FCA can apply requirements that increase incrementally as firms grow. As a result, unauthorised property collective investment schemes and internally managed AIFMs outside a new exemption would need to become authorised, while small internally managed listed closed-ended investment companies below the current thresholds would be exempt if they meet specified conditions. Other changes include replacing the current approval model for authorised UK AIFMs marketing UK AIFs with FCA notification, removing the 20-day advance marketing notice, simplifying private equity portfolio company disclosures, and removing the legislative unlimited liability provision for external valuers. HM Treasury is seeking technical comments on the draft statutory instrument by 14 October 2026 and expects to lay final legislation in early 2027, subject to parliamentary time. The new legislation is intended to commence at the same time as replacement FCA rules, with transitional arrangements to be determined ahead of the new regime coming into force in 2028.
HM Treasury2026-07-14
HM Treasury launches technical consultation on draft Alternative Investment Fund manager reforms, moving most firm requirements to FCA rules
HM Treasury has issued draft legislation to overhaul the UK regime for alternative investment fund managers, moving most detailed firm requirements from statute into Financial Conduct Authority rules. The package would remove most legislative size thresholds, narrow the small AIFM registration regime, retain the National Private Placement Regime, and streamline marketing and disclosure requirements. Technical comments are requested by 14 October 2026, with final legislation expected in early 2027 and commencement alongside new FCA rules.