Investment management update - June 2026

Welcome to the latest edition of our investment management update. This publication has been tailored to highlight topical news, cases and changes in the law impacting the investment management sector.
 

UK

Investment Association’s Private Markets Summit 2026: on 11 May 2026, Sarah Pritchard, FCA deputy chief executive, gave a speech at the Investment Association’s Private Markets Summit 2026. The speech noted the growth of private markets in the UK which is approaching £1.2 trillion in assets under management with fundraising of £58.7 billion in 2025. Ms Pritchard also noted that ten firms currently manage LTAFs, with 15 umbrella LTAFs and 29 sub-funds between them and that in less than a year, LTAF assets under management grew from £5 billion to £7.5 billion.

The speech focused on the fundamental importance of confidence in private markets underpinned by first line controls at firms, sensible regulation and a well-connected regulatory system. Conduct risks were discussed in particular and Ms Pritchard highlighted the importance of robust valuation frameworks to investor confidence, and the FCA’s report on private market valuation practices, published in March 2025. The FCA’s multi-firm review of conflicts of interest (currently underway) was also noted and findings from this review will be published later this year.

Laying the foundation for confidence | FCA

Bereavement processes for consumer investment firms: on 13 May 2026, the FCA published a press release announcing the commencement of its review of whether investment firms are doing enough to support bereaved customers. This review was identified as a priority in its Consumer Investments Regulatory Priorities Report published in March 2026 and forms part of its broader Consumer Duty work. From May 2026, the FCA will contact selected firms as part of the review and will publish findings later this year.

FCA reviews whether investment firms are doing enough to support bereaved customers | FCA

Enhancing Financial Services Bill: on 13 May 2026, the King’s speech outlined the changes which would be introduced by the Enhancing Financial Services Bill (the “Bill”). The Bill will deliver key parts of the Leeds reforms including reforms to the Financial Ombudsman Service and the Senior Managers and Certification Regime (“SMCR”). The statutory framework underpinning the ring-fencing regime, which requires major banks to separate their UK retail banking services from investment banking activities, will also be updated. 

On 19 May 2026, the Bill received its first reading in the House of Lords. Explanatory notes and an impact assessment were also published.

The King's Speech | GOV.UK

Financial Services and Markets Bill [HL] publications - Parliamentary Bills - UK Parliament

Consumer Duty expectations: on 14 May 2026, the FCA published a blog post by Charlotte Clark, FCA director of cross-cutting policy and strategy, which provides practical examples of how the FCA expects firms to help customers in difficult times. The FCA requires firms to check that their approach remains appropriate in the current environment and to make changes where it does not.

Supporting customers through challenging times | FCA

Financial crime: on 14 May 2026, Nikhil Rathi, FCA chief executive, gave a speech at the FCA's financial crime conference. The speech flagged the need for responses to financial crime to be system-wide (including better information sharing, smarter use of technology and deeper collaboration across firms, regulators, government and law enforcement). Mr Rathi discussed the threat posed by AI to cyber security vulnerabilities as well as the volume of cyber threats noting that the FCA’s intelligence infrastructure has processed over 52 million intelligence records. He explained that in order to fight financial crime more effectively and not to be spread too thin, the FCA’s approach is to prioritise. Mr Rathi also stated that there is a choice to be made by the Government which is a policy question rather than a regulatory question as to where financial crime sits in relation to growth, innovation and risk appetite.

Working together against financial crime | FCA

Tokenisation: on 18 May 2026, the FCA and Bank of England published a call for input on how to support the safe adoption of tokenisation in UK wholesale financial markets. This follows the publication of the FCA's policy statement on fund tokenisation and the Direct to Fund model, published on 30 April 2026.

Call for Input: The future of tokenisation - A joint vision from the authorities for UK wholesale financial markets

PS26/7: Progressing Fund Tokenisation

Regulatory Initiatives Grid: on 19 May 2026, the Financial Services Regulatory Initiatives Forum published the Regulatory Initiatives Grid. This grid sets out the regulatory pipeline. 

Key developments include:

• the consultation on the scope of the Consumer Duty including through distribution chains (H1 2026);
• the feedback statement on Expanding Consumer Access to Investments (Q3 2026);
• the policy statement on the Advice Guidance Boundary Review (Q4 2026);
• the Consultation Paper on reviewing financial promotion rules for mainstream investments in COBS 4 (September 2026);
• the consultation paper on simplifying costs and charges under MIFID and other disclosure rules (Q3 2026);
• the consultation paper on the repeal and replacement of the Alternative Investment Fund Managers Directive (mid-2026);
• the consultation on liquidity risk management in funds, including retail funds investing in illiquid assets (H2 2026);
• the consultation paper on solo remuneration rules review for AIFMs, MIFID firms and UCITS management companies (Q3 2026); and
• the consultation on the second phase of SMCR reforms (Q3/4 2026).

Regulatory Initiatives Grid: May 2026

Registration of authorised fund assets: on 21 May 2026, the FCA published CP26/16 on the registration of authorised fund assets. The proposed changes seek to promote the ability of authorised alternative investment funds ("AIFs") to invest in private markets. The changes would allow depositaries of authorised AIFs managed by full-scope AIFMs to delegate to a third party certain asset registration and custody functions. The FCA considers that the relevant AIFMD derived provisions do not currently permit such delegations.

CP26/16: Registration of authorised fund assets

Sanctions systems and controls: on 28 May 2026, the FCA published its findings from its review of the sanctions systems and controls of over 150 FCA-supervised firms across a range of financial services sectors. The FCA noted the increase in the total value of assets in the UK reported as frozen as a result of the increase in sanctions exposure. The FCA set out good and poor practices in areas including: governance and oversight; management information; risk assessments; due diligence and ongoing monitoring; screening measures and reporting. 

The most common root causes of reported sanctions breaches were weaknesses in due diligence, alert management, transaction and name screening, as well as the management of frozen assets and compliance with specific and general licences. The FCA directed firms to focus on strengthening their control frameworks in these areas in particular.

Sanctions systems and controls in our firms: our findings | FCA