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UK AIFM reforms: FCA/HM Treasury propose NAV‑based three‑tier regime, plus changes to prudential, remuneration, business restrictions, depositaries and reporting, with alignment to UCITS/MiFID

Published on: 01 May 2025

Published by a Law360 reporter
Legal News
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Article summary

Proposed changes to scope of UK regime

Current regime

In the UK, the AIFM framework currently separates firms into:

  • full-scope AIFMs: FCA-authorised and required to meet a broad rulebook, covering disclosures, reporting and robust operational standards
  • small authorised AIFMs: authorised by the FCA but not held to the comprehensive obligations imposed on full-scope AIFMs
  • small registered AIFMs: registered with the FCA and subject only to limited reporting. This route was introduced for firms not previously FCA-authorised, such as managers of social entrepreneurship funds and registered venture capital funds

The threshold for becoming a full-scope AIFM is:

  • over €100m of assets under management in leveraged assets, generally relevant to hedge fund managers
  • over €500m of assets under management in unleveraged assets with no redemption rights for five years, typically relevant to private equity sponsors

Proposed regime

In its call for input, the FCA proposes replacing the current framework with a three-tier categorisation of AIFMs—large, mid-sized and small—intended to supersede the existing regime...

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