Insights

Deep Dives

We examine the regulatory questions relevant to fund managers, looking at the rules, risks and policy shifts that cut across them all. Written by practitioners, each piece goes beyond what the rules say to explore where they lead, what they change and ultimately what matters.

PRIVATE EQUITY

Private Equity Fund Managers

For GPs and their boards: the valuation, conflicts and disclosure questions the FCA now treats as governance, read through the lens of AIFMD II and the SDR labelling regime.

Pressure points

Private market valuations
Conflicts of interest
Continuation funds
AIFMD II
Fee & expense allocation
SDR labelling

6 Deep Dives

FlagshipPrivate Equity Fund Managers

Valuations ReviewSYSC 10FUND 3.9

“Show me the valuation governance”: turning the FCA’s private-market-valuations review into a board-ready control framework

An FCA examiner sits with one document open: the valuation committee paper for a single asset. The questions come straight off that page. Who challenged this mark, and what did they say? The number moved up between quart

Read the Deep Dive9 min

Conflicts of interest in private equity

The FCA confirmed a dedicated multi-firm review of conflicts of interest at private markets firms in its February 2025 supervisory strategy letter to the asset management and alternatives portfolio. It has run the way th

SYSC 10Conflicts Review

Private Equity10 min

Continuation funds and GP-led secondaries: the file you will be asked to produce

A continuation fund puts the manager on both sides of the same deal. Acting for the existing fund, the manager is the seller. Acting for the new vehicle it will run and earn on for years, it is also the buyer. It sets th

SYSC 10ILPA 2023

Private Equity9 min

AIFMD II for PE: the delegation, reporting and loan-origination changes arriving in 2026

AIFMD II applies from 16 April 2026. It does not apply directly to UK alternative investment fund managers because the UK is no longer required to implement amendments to the AIFMD framework following Brexit. UK firms th

AIFMD II2024/927

Private Equity11 min

Fee and expense allocation

Look at what a limited partner pays for in a year. The management fee comes off first. Then the offsets that are meant to reduce that fee, the deal costs charged to the fund, the broken-deal expenses when a transaction d

SYSC 10ILPA 3.0

Private Equity9 min

SDR and fund labelling for private markets: when “impact” becomes a regulated claim

The SDR investment labels and the naming rules were written for retail funds, and they mostly pass a buyout firm by. The anti-greenwashing rule did not. It sits in the FCA’s ESG sourcebook at ESG 4.3.1R, it has bound eve

SDRESG 4.3.1RPS23/16

Private Equity10 min

HEDGE FUNDS

Hedge Fund Managers

For trading-led managers: building market-abuse surveillance, information barriers and algorithmic-trading governance that survive a supervisory visit rather than a policy review.

Pressure points

Market abuse surveillance
The MNPI wall
PA dealing
Algorithmic trading (RTS 6)
Side letters & MFN

6 Deep Dives

FlagshipHedge Fund Managers

MARMAR 7ASYSC 6

When the FCA pulls one of your trades: market-abuse surveillance under UK MAR Article 16

An FCA examiner starts with a single trade — often one your own systems never flagged — and works backwards through it. The examiner checks whether surveillance covered it, whether an alert fired, whether the analyst who

Read the Deep Dive9 min

Inside information and the MNPI wall: building the control the FCA assumes you do not have

A fund running expert calls, channel checks, corporate access and market soundings routinely encounters inside information. In primary research, proximity to a genuine edge means proximity to non-public information. The

MARSYSC 10

Hedge Funds8 min

PA dealing in a sub-£1bn shop: where proportionality gets tested

A small firm is entitled to a simpler personal-account dealing regime than a global bank. It is not entitled to one that produces no records. Sub-billion-pound firms often confuse a light control with an absent one: ‘pro

COBS 11.7ASYSC 10

Hedge Funds8 min

Choosing and calibrating a trade-surveillance vendor without buying shelfware

A firm licenses a respected vendor platform, switches on the standard scenario library at the thresholds the vendor shipped, and writes in its compliance plan that it now has trade surveillance. A licensed system running

MARSurveillance

Hedge Funds6 min

Algorithmic trading governance under RTS 6: the controls for systematic strategies

RTS 6 is now supervised in earnest. In August 2025 the FCA published a multi-firm review of algorithmic-trading controls, and the first thing it asked each firm to hand over was the RTS 6 annual self-assessment and valid

RTS 6MAR 7A

Hedge Funds8 min

Side letters and MFN management: the conflicts and disclosure the FCA reads as fairness

Most of what a side letter contains is commercially significant and harms no one outside the deal. A fee discount comes out of the manager’s pocket. A bespoke reporting format is an administrative courtesy. Two terms are

SYSC 10FUNDILPA

Hedge Funds8 min

PRIVATE CREDIT

Private Credit Fund Managers

The parallel banking system, examined from the inside: the market structure, fund design, domicile and liquidity decisions the regulator now reads as governance choices.

Pressure points

Loan-book valuation
Liquidity & redemption
Fund structures
Domicile selection
AIFMD II origination

8 Deep Dives

FlagshipPrivate Credit Fund Managers

AIFMD IIFUND 3.6FSB

Private credit under the regulatory microscope

Two regulators now examine private credit from opposite ends at once. Over a decade the asset class grew alongside private equity from about three trillion dollars to roughly eleven trillion, part of a private markets ec

Read the Deep Dive8 min

Valuing a private loan book the way the regulator wants it evidenced

A private loan has no market price. Whatever number sits beside it in the NAV is a model output and a judgement, and in credit that judgement leans one way. The pull is to hold a loan at or near par well after the borrow

Valuations ReviewFUND 3.9IFRS 13

Private Credit8 min

Liquidity management and redemption terms in open-ended credit vehicles

An open-ended or evergreen credit vehicle offers a redemption cycle its multi-year loans can’t match. It lets investors redeem on a set cycle, monthly, quarterly, sometimes more often, while the portfolio is loans that t

FUND 3.6CP25/38IOSCO

Private Credit9 min

Loan origination funds under AIFMD II: the leverage caps and retention rule

AIFMD II gives the EU its first common rulebook for funds that originate loans, and it takes effect on 16 April 2026. For a private credit manager this is a priority read, because it changes lending itself rather than ad

AIFMD II2024/927

Private Credit9 min

Private credit liquidity crisis: why retail fund redemptions are exposing a structural flaw

Private credit was sold to retail and wealth investors as a simple proposition: institutional returns with convenient access. Recent redemption stress at flagship retail-facing credit vehicles showed the mismatch between

FUND 3.6COLL 15SWES

Private Credit8 min

Private debt as a parallel banking system, and what it asks of the people who govern it

Private debt now does much of what regulated banks used to do. The asset class has grown close to tenfold since 2008 and reached roughly $1.5 trillion in 2024, with credible projections putting it near $3.5 trillion by 2

AIFMD IIFUND 3.9COLL 15

Private Credit10 min

Optimal fund structures for private debt: why fund structure for private debt is a governance decision

The structure of a private debt fund tends to get treated as a tax and marketing question, something you hand to lawyers once the strategy is fixed. In the funds I see, it decides a good deal more than that. The way a fu

AIFMD IIFUND 3.6COLL 15.8

Private Credit9 min

Selecting fund domiciles for private debt funds: a governance view of fund domicile

Domicile looks like a tax question. In the funds I see, it turns out to govern almost everything else. Where you set up a private debt fund decides which investors can buy it, which regulator supervises it, what it costs

AIFMD IIBEPSQAHC

Private Credit10 min

CROSS-SECTOR REGULATORY TOPICS

Cross-Sector Regulatory Topics

The rules that bind every manager regardless of strategy: the documented-versus-evidenced backbone of Consumer Duty, operational resilience, SM&CR, prudential capital and the incoming digital-assets regime.

Pressure points

Consumer Duty
Operational resilience
SM&CR
ICARA & prudential
Digital assets
Systemic designation

11 Deep Dives

FlagshipCross-Sector Regulatory Topics

CP26/13CP25/14PS26/7

The FCA’s digital assets regime and fund distribution

When the FCA’s digital assets programme reaches a manager’s desk, it tends to get filed under crypto and marked non-material. Very little of this work is about cryptocurrency as an asset class. It’s about the pipes inves

Read the Deep Dive6 min

FlagshipCross-Sector Regulatory Topics

SYSC 15ASYSC 8PS24/16

Operational resilience under SYSC 15A is a board accountability

Ask a fund manager’s chief technology officer whether the firm is operationally resilient, and the answer usually describes the plumbing: the servers have redundancy, the data is backed up, the disaster-recovery site was

Read the Deep Dive8 min

Consumer Duty’s Assessment of Value and fund economics

COLL’s Assessment of Value obligation, not the market, is compressing fund fees. UK authorised fund managers have carried the assessment of value obligation since 2019, and the Consumer Duty has since reinforced it. The

COLL 6.6PRIN 2A.4PROD 3

Authorised Fund Managers9 min

Templated compliance frameworks and regulatory risk

A compliance template arrives describing a firm that does not exist: some average of the managers it was drafted for, with committees, roles and monitoring cycles that belong to none of them in particular. Buy it, adopt

SYSC 4.1.1R

Smaller Asset Managers7 min

Fund tokenisation restructures who is accountable, not just the technology

Tokenisation reaches most boards as a technology proposal: move the register onto a distributed ledger, take out cost, settle faster. The technology framing understates the change. The FCA’s tokenisation work, finalised

CP25/28PS26/7COLL

Asset Managers8 min

SM&CR was built for banks. Fund managers are paying the price.

The senior managers and certification regime was designed to fix a banking problem. After 2008, regulators needed a way to trace responsibility inside large, complicated banks, so that when something failed there was a n

SYSC 23-27COCONPS26/6

Fund Managers8 min

Simplifying the regulatory capital framework for investment firms

Around 3,100 FCA-regulated investment firms hold their regulatory capital under a regime that was never built for them. The Investment Firm Prudential Regime has been live since 1 January 2022, and it was meant to replac

MIFIDPRUIFPRICARA

Investment Firms8 min

How does proportionality apply for new and simple firms?

Proportionality is a position a firm has to understand and evidence, not an automatic reduction in obligations. The principle is that requirements should be sized to a firm’s risk, complexity and importance, rather than

MIFIDPRUSNIIFPR

New & Simple Firms9 min

Identifying market manipulation in digital assets: why your surveillance stack was built for the wrong market

Legacy surveillance assumes stable identity, market hours, a few venues and familiar instruments — none of which hold in crypto. The systems most firms run were designed around four assumptions: that participants can be

MARMAR 7A

Trading Firms9 min

Designing risk management frameworks for digital assets: why adapting your TradFi model is not enough

When a firm starts dealing in digital assets, the instinct I see most often is to take the risk management framework that already works for traditional assets and stretch it to cover the new ones. It’s the natural move,

SYSCFCA Crypto Roadmap

Risk Functions8 min

Navigating G-SII designation: a practical guide for global banking institutions

A G-SII designation is a supervisor telling you, in plain terms, that your failure would threaten the stability of the global financial system, and that you will hold more capital because of it. Treated as a penalty, the

BaselFSBG-SIB

Global Banks8 min