The reporting that starts supervision
Supervision starts from data the firm files itself. FUND 3.4.3R requires a full-scope UK AIFM to give the FCA, for each UK and EEA AIF it manages and each AIF it markets in the UK: the percentage of assets subject to special arrangements arising from their illiquid nature; any new arrangements for managing the fund's liquidity; the current risk profile and the risk management systems used for market, liquidity, counterparty and other risks; the main categories of assets held; and the results of the liquidity and risk management stress tests. SUP 16.18 carries the return.
FUND 3.2.5R requires periodic disclosure to investors of the first three items, and the two lists must agree where they overlap. Reportable stress test results are not internal documents.
Notification duties
Only one of the duties below is filtered by significance; Principle 11 requires disclosure of anything of which the FCA would reasonably expect notice.
| Trigger | Provision | Timing |
|---|---|---|
| Failing a threshold condition; any matter which could significantly damage the firm's reputation, cause serious detriment to a customer, or have serious financial consequences for the UK financial system or other firms | SUP 15.3.1R | Immediately on becoming aware, or on information reasonably suggesting it has occurred or may occur |
| A significant breach of a rule, which includes a Principle, a Statement of Principle or a COCON rule | SUP 15.3.11R(1)(a) | Immediately; significance judged on SUP 15.3.12G |
| A breach of the AIFMD UK Regulation, or of onshored regulations previously adopted under AIFMD | SUP 15.3.11R(1)(g), (h) | Immediately. Neither limb carries the word significant |
| Material changes to the conditions under which permission to manage an AIF was granted | SUP 15.3.26R | Before the change is implemented |
| A small authorised UK AIFM ceasing to meet the regulation 9 conditions, or managing a new AIF | SUP 15.3.28R and 15.3.29R | Immediately on form 6D, then apply within 30 calendar days to vary permission; before a new AIF, form 6A |
That guidance judges significance by potential financial losses, frequency, implications for systems and controls, and delay in identifying or rectifying the breach. By its own terms it governs limbs (1)(a) and (1)(aa) only, so an AIFMD UK Regulation breach is notifiable whether or not the firm assesses it as significant.
Individual accountability
Four conduct rules apply to senior managers: reasonable steps to ensure the business for which the manager is responsible is controlled effectively (COCON 2.2.1R) and complies with the requirements and standards of the regulatory system (2.2.2R); reasonable steps to ensure delegation of those responsibilities is to an appropriate person and overseen effectively (2.2.3R); and appropriate disclosure of information of which the FCA or PRA would reasonably expect notice (2.2.4R).
The record that answers the third condition is the statement of responsibilities. SUP 10C.11.6AR, in force since 24 April 2026, requires a revised statement immediately on a significant change in an SMF manager's responsibilities of the kind described in section 62A, even if it is never sent to the FCA. It is a single document per approved SMF manager covering every senior management function held.
From supervisory review to draft rule
In March 2025 the FCA published findings from a multi-firm review of private market valuation practices, and no rule changed. The areas for improvement, recorded at CP26/28 Box 1, included fuller documentation of valuation-related conflicts, sufficient independence in valuation decision making and committee voting membership, and defined processes, with events and thresholds, for ad hoc valuations.
Sixteen months later the same material appears in draft rule text, not yet law. At 4.2 the FCA says its proposed valuation rules reflect the guidance issued in 2025 after that review and align with the IOSCO valuation standards; at 4.5 it proposes record-keeping of decision-making and consideration of ad hoc valuations; and draft ALTS 6.2.10R would stop a large UK AIFM's portfolio management function making the final valuation determination.
Recurring obligations
Three obligations in force carry a stated frequency. Risk management systems are reviewed with appropriate frequency and at least once a year, and adapted whenever necessary (FUND 3.7.6R). Assets are valued and NAV per unit calculated at least annually, for an open-ended fund at a frequency appropriate to the assets held and to its issuance and redemption frequency, and for a closed-ended fund on any increase or decrease of capital. Liquidity stress tests are conducted regularly under normal and exceptional conditions.
Not an annual item
Revising a statement of responsibilities is event-driven: a revised statement is required immediately on a significant change of the kind described in section 62A, so an annual re-issue leaves the rest of the year uncontrolled.
The records supervision asks for
Three of the four records below are rule-required. FUND 3.10.11R requires review of each delegate and sub-delegate on an ongoing basis, which an annual pack alone does not evidence. The depositary contract must regulate the flow of information the depositary needs; delegation and administration agreements carry no equivalent requirement, so the clause has to be written in with its named recipient. The third is the reconciliation between the three items owed to investors and the same three owed to the FCA.
The fourth is an ownership map: one row for each material regulatory decision, with the obligation, the owner, the performer and the escalation route. No prescribed responsibility covers a FUND obligation, and an ownership map reaches nobody until it is asked for.
Alongside this module
Where this subject is covered elsewhere in the course.