• On 31  January 2025, the FCA issued Handbook Notice 126 which included amendments to the COLL sourcebook of the FCA Handbook. The notice set out changes to an existing rule that sets limits on the ability of a UCITS scheme to hold units of other collective investment schemes (Second Schemes). The changes clarify how the rule applies to umbrella/sub-fund structures, and disapply the rule in certain situations where the investing UCITS scheme and Second Scheme are managed by the same firm. In particular, the FCA has clarified that the 25% maximum limit applies to each individual sub-fund in an umbrella. This will allow an authorised fund manager greater investment flexibility when managing a range of UK UCITS schemes organised as sub-funds within an umbrella. The FCA has stated that it will still be possible for an AFM to operate a fund of funds with fewer restrictions under the non-UCITS retail scheme regime.

Handbook Notice 126

• On 31 January 2025, the FCA opened a consultation on proposing further changes to the listing rules including to align disclosure requirements for low denomination bonds with those for higher denominations to make capital raising easier for issuers. The FCA’s intention is to encourage listed companies to offer bonds of smaller denominations to enable greater participation by both wealth managers and retail investors. 

FCA sets out further proposals to support growing business and investment opportunities | FCA 

CP25/2: Further changes to the public offers and admissions to trading regime and the UK Listing Rules | FCA

• On 23 January 2025, the FCA published a report and feedback on the steps which wholesale brokers should be taking to reduce money laundering through the UK’s capital markets. The FCA found that while firms were making progress on AML controls, there were areas where firms need to make further improvements. Although primarily directed at brokers, the report will be relevant to all firms operating in the financial markets. At the same time the FCA published a portfolio letter to wholesale brokers setting out supervisory focus areas including prudential risk management, financial crime, culture, risk management and financial resilience.

FCA published review of wholesale brokers anti-money laundering controls | FCA

• On 16 January 2025, the FCA updated its web page for overseas funds seeking recognition. The FCA also provided a new material change form.

FCA update for firms on application timelines for overseas fund regime (OFR) | FCA

• On 16 January 2025, the FCA chief executive Nikhil Rathi responded to the government’s growth strategy and sent an open letter to the Prime Minister and Chancellor setting out how the FCA will support economic growth. Mr Rathi addressed, in particular, the FCA’s reforms of the wholesale markets including streamlining regulatory requirements for the asset management sector and simplifying product information. The letter also discussed reducing the regulatory burden on firms by simplifying the FCA Handbook, making the Senior Managers and Certification Regime more flexible and removing the requirement for a Consumer Duty board champion. In response to the government’s strategy of informed risk taking, Mr Rathi acknowledged that there will be failures and requested guidance from the Government for metrics for tolerable failures.

FCA considers how it will support economic growth| FCA

• On 14 January 2025, the FCA published a web page on how firms should tackle polluting behaviour and meet their redress liabilities. The FCA emphasised the need for firms to have adequate financial resources to be able to provide redress in compliance with Principle 4 (Financial prudence), the threshold conditions and any other applicable prudential standards. The web page sets out practical measures that firms should take to assess redress liabilities and ensure that these are appropriately provisioned for and addressed. 

FCA clarification on obligations of firms to tackle polluting behaviour | FCA