Key facts
- The FCA is proposing reforms to simplify reporting for UK asset managers.
- The new framework, FRAME, aims to modernize the AIFMD and reduce costs.
- Estimated annual savings for the industry are £128m.
- Firm size will be determined by Net Asset Value (NAV) for regulatory scrutiny.
- Smaller firms (under £750m NAV) will have lighter rules.
- Larger firms (over £5bn NAV) will face more rigorous scrutiny.
- The consultation period for the proposals ends on September 22, 2026.
The UK's Financial Conduct Authority (FCA) has proposed a significant overhaul of reporting rules for asset managers, aiming to simplify complex regulations and reduce industry confusion. The proposed reforms, under a new framework dubbed Fund Reporting for Asset Management Entities (FRAME), are expected to save the industry £128 million annually.
FRAME is designed to modernize the existing Alternative Investment Fund Managers Directive (AIFMD) framework, which has been criticized for being outdated and overly complex, with rules dating back to 2013 and originating from EU regulations. The new system will replace numerous data fields currently required under AIFMD, such as those covering portfolio concentration and risk profiles, with consolidated datasets that monitor wider market risk.
Simon Walls, executive director of markets at the FCA, stated that tailoring the regime for UK asset managers will lead to better data collection while saving the industry substantial amounts and boosting freedom for smaller firms through a focus on proportionality. The new framework defines a firm's size based on its Net Asset Value (NAV). Firms with NAV under £750 million will face lighter rules and minimal paperwork, while those with over £5 billion will undergo more rigorous scrutiny due to their potential impact on the wider economy. Mid-sized firms will experience a more flexible system with increased scrutiny compared to smaller entities. This change also eliminates the previous rule that imposed immediate and costly structural changes upon firms exceeding a NAV threshold.
Industry figures have welcomed the consultation, with Jock Glover, chief executive of Independent Investment Management Initiative, noting that simplified reporting and reduced administrative burdens will allow management teams to focus more on client outcomes. Roman Dabir, partner at Reed Smith, added that the changes could remove barriers for smaller managers entering the UK market and align with the FCA's shift towards outcomes-based supervision and its new growth and competitiveness objective.