FCA

Financial Conduct Authority (UK)

High Impact

FCA consults on reformed UK AIFM regime, new ALTS sourcebook and tiered manager framework

Published

Jul 13, 2026

Topics

Alternative investment fund managers, Asset management, FCA Handbook, Regulatory reform, Fund reporting, Prudential requirements, Remuneration

Executive Summary

The FCA has published CP26/28, a consultation on new rules for UK alternative investment fund managers (AIFMs). The proposals would reform a regime largely derived from retained EU AIFMD law, which the FCA considers complex and insufficiently proportionate to firm size and activity. The consultation proposes updated size thresholds, a new 3-tier structure for small, medium and large AIFMs, and a new Alternative Investment Funds sourcebook (ALTS) to consolidate most AIFM rules in one place. The FCA is also consulting separately on Fund Reporting for Asset Management Entities (FRAME) and remuneration reforms for solo-regulated firms, both relevant to asset managers. Responses to CP26/28 are due by 14 October 2026, while responses to most discussion chapters are requested by 18 September 2026. The Treasury is running a parallel consultation on underlying legislation, and the FCA states that implementation of the new regime is currently envisaged for 2028. Firms should treat this as a major strategic consultation, not an immediate rule change.

What Changed

modifiedAIFM size thresholds

Current firm size thresholds under the UK AIFM framework are derived from the existing retained EU AIFMD-based regime.

New

The FCA is consulting on updated thresholds as part of a more proportionate regime.

newThree-tier AIFM structure

The current approach does not use the FCA’s proposed small, medium and large AIFM structure.

New

A proposed new 3-tier structure would classify AIFMs as small, medium or large, with graduated application of rules.

newAlternative Investment Funds sourcebook

AIFM requirements are currently spread across legislation, Treasury regulations and FCA rules.

New

Most AIFM rules would be consolidated into the proposed ALTS sourcebook, making the regime easier to navigate and update.

modifiedRisk-based application of rules

The existing rules do not sufficiently distinguish between, for example, funds frequently trading financial instruments and funds holding illiquid investments over a longer term.

New

The proposed regime would better match requirements to firms’ size, activities and risks.

newLinked reform programme

AIFM regime requirements, reporting and remuneration rules are currently addressed through existing FCA and legislative frameworks.

New

CP26/28 sits alongside CP26/26 on FRAME and CP26/27 on remuneration reform for solo-regulated firms.

Business Impact

Who is affected

Directly affected

UK-authorised AIFMs, UK-registered AIFMs, residual CIS operators, firms marketing alternative investment funds in the UK, and firms considering entry into the UK alternative investment market.

Indirectly affected

depositaries, prime brokers, delegates of AIFMs, trade bodies and industry associations, investors in AIFs including professional and retail investors, and UCITS Management Companies in relation to the discussion chapter on prudential reforms for asset managers.

Jurisdictions

United Kingdom

Business processes

AIFM categorisation and threshold monitoring, Authorisation and registration assessment, FCA Handbook and policy mapping, Fund governance and oversight, AIF marketing into the UK, AIFM delegate, depositary and prime broker oversight, Regulatory change management and consultation response governance

Estimated effort

High

Compliance risk

High

Affected Reports

AIFM regulatory perimeter and tier classification assessmentAIFM size threshold monitoring controlFCA Handbook-to-policy rule mapping for AIFM proceduresAIF marketing approval and UK distribution controlConsultation response and regulatory change impact assessment

Field	Validation rule
AIFM size threshold / tier classification	The FCA proposes updated size thresholds and a new small, medium and large 3-tier AIFM structure.
AIFM activity and risk profile	The FCA states the revised regime should better distinguish firms and funds by activities and risks, including trading financial instruments versus holding illiquid long-term investments.
Applicable AIFM rule source	The FCA proposes a new Alternative Investment Funds sourcebook, ALTS, to bring most AIFM rules together.

Recommended Actions

7 suggested next steps· derived from source analysis

1
Confirmed actionStep 1 of 7
determine whether to respond to CP26/28 by 14 October 2026 and whether any discussion-chapter responses are needed by 18 September 2026.
2
AI generatedStep 2 of 7
map each UK AIFM, registered AIFM and UK-marketed AIF to the proposed small, medium or large categorisation once the draft rules and thresholds have been reviewed.
3
AI generatedStep 3 of 7
compare existing AIFM compliance manuals, governance documents and monitoring controls against the proposed ALTS structure to identify likely remediation areas.
4
AI generatedStep 4 of 7
assess whether funds with frequent financial instrument trading and funds holding illiquid long-term assets may be treated differently under the proposed risk-based framework.
5
AI generatedStep 5 of 7
coordinate CP26/28 analysis with CP26/26 FRAME and CP26/27 remuneration workstreams to avoid inconsistent responses or duplicated implementation planning.
6
AI generatedStep 6 of 7
review impacts on depositary, prime broker, delegate and marketing arrangements where contractual duties reference current AIFMD-derived rules.
7
AI generatedStep 7 of 7
establish board or senior management reporting on the consultation, expected FCA policy statement, second consultation and the FCA’s envisaged 2028 implementation timetable.

Timeline

publication

Jul 14, 2026

FCA published CP26/28 and opened the consultation.

consultation deadline

Sep 18, 2026

Deadline requested by the FCA for responses to the discussion chapters, except the discussion chapter on prudential reforms.

other

Sep 1, 2026

FCA plans to host a prudential roundtable as part of its engagement on reviewing the prudential regime for fund managers.

consultation deadline

Oct 14, 2026

CP26/28 consultation closes; the discussion chapter on prudential reforms also closes on this date.

implementation

2028

FCA states that the implementation date currently envisaged for the new regime is in 2028.

Sources

AI-generated analysis is based on the following primary sources. Always verify against the official publication.

Consultation paper webpageFinancial Conduct AuthorityJul 14, 2026
CP26/28: The UK AIFM Regime ↗
https://www.fca.org.uk/publications/consultation-papers/cp26-28-uk-aifm-regime
Regulatory reporting guidance webpageFinancial Conduct AuthorityJun 8, 2016
AIFM reporting ↗
https://www.fca.org.uk/firms/aifmd/reporting
Consultation paperFinancial Conduct AuthorityDate not specified
CP26/26: Fund Reporting for Asset Management Entities (FRAME) ↗
https://www.fca.org.uk/publications/consultation-papers/cp26-26-fund-reporting-asset-management-entities-frame
Consultation paperFinancial Conduct AuthorityDate not specified
CP26/27: Remuneration reform for solo-regulated firms ↗
https://www.fca.org.uk/publications/consultation-papers/cp26-27-remuneration-reform-solo-regulated-firms

Related Evidence

Verified source support for this analysis

The evidence agent checks whether the drafted finding is supported by official publications and relevant public source material.

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