Asset Management

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The proposals aim to make the UK regime more proportionate and suggest different rules
applying to hedge funds, venture capital firms, and private equity houses.

By Nicola Higgs, Rob Moulton, and Jonathan Ritson-Candler

On 7 April 2025, the FCA published a Call for Input, and HM Treasury published an Open Consultation, on the reform of the UK regulatory regime for alternative investment funds (AIFs) and their managers (AIFMs), following the UK’s implementation of the EU Alternative Investment Fund…

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A review of fund and portfolio managers found a number of good practices, but also revealed the need for improvement in areas such as conflict management.

By Rob Moulton, Nicola Higgs, Becky Critchley, and Charlotte Collins

On 5 March 2025, the FCA published the findings from its review of private market valuation practices. The FCA undertook this review due to the growing importance of private markets and concerns that robust valuation practices need to be implemented to ensure trust and confidence in these markets. The FCA highlights that effective valuation practices are needed to counterbalance the fact that valuations in private markets are less transparent than in public markets, and potentially susceptible to vulnerabilities such as conflicts of interest.

The FCA reviewed the robustness of valuation processes by firms managing funds or providing portfolio management and/or advisory services in the UK for private equity, venture capital, private debt, and infrastructure assets. This involved sending a questionnaire to a sample of 36 firms, and then conducting an in-depth review of governance and processes in relation to a sub-set of these firms.

banking

Regulators seek to provide clarity and transparency on the bank merger review process, but changes may increase application complexity and unpredictability.

By Arthur S. Long, Pia Naib, and Deric Behar

Consistent with ongoing initiatives to strengthen US antitrust regulation,1 the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Department of Justice (DOJ) recently announced changes that may reshape the landscape of bank mergers. These updated rules, policies, and guidelines…

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The regulator is providing temporary flexibility in light of concerns that asset managers need extra time to prepare.

By Nicola Higgs, Jaime Martin, Sara Sayma, and Charlotte Collins

On 9 September 2024, the FCA published a statement on its naming and marketing rules under the Sustainability Disclosure Requirements (SDR) regime, allowing asset managers more time to get ready for the new requirements.

The SDR is being implemented on a staggered basis; the new investment labels have been…

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The proposal would establish stricter oversight of certain transactions and responds to concerns that large asset managers may be exerting influence on FDIC-supervised institutions.

By Arthur S. Long, Pia Naib, and Deric Behar

On July 30, 2024, the Board of Directors of the Federal Deposit Insurance Corporation (FDIC) approved a Notice of Proposed Rulemaking to amend the agency’s regulations under the Change in Bank Control Act1 (the Proposal)2. The Proposal would require advance notice to…

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The FCA’s long-awaited regime seeks to raise standards, increase consumer understanding, and reduce instances of greenwashing.

By Paul A. Davies, Laura N. Ferrell, Sarah E. Fortt, Nicola Higgs, Betty M. Huber, James McCrory, Nell Perks, Michael D. Green, Clare Scott, James Bee, Anne Mainwaring, Jaime Martin, Ella McGinn, and Charlotte Collins

On 28 November 2023, the FCA published its Policy Statement (PS23/16) containing final rules on its Sustainability Disclosure Requirements (SDR) and investment labelling regime. The FCA originally consulted on this regime in October 2022 (see this Latham blog post). Publication of the final rules was somewhat delayed in light of the volume of feedback received to the consultation.

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The FCA has set out good and poor practices for asset managers to consider in relation to funds with ESG or sustainable characteristics.

By Nicola Higgs, Anne Mainwaring, and Charlotte Collins

On 16 November 2023, the FCA published the findings from its review of how asset managers have been embedding current regulatory expectations regarding the design, delivery, and disclosure of funds marketed as having ESG or sustainable characteristics.

With the FCA yet to finalise its Sustainability Disclosure Requirements (SDR) and investment labelling regime, it reviewed authorised fund managers’ (AFMs’) compliance with existing regulatory requirements, including the Guiding Principles set out in the Dear Chair letter issued in July 2021 (see this Latham blog post). The recently implemented Consumer Duty has added an extra dimension for AFMs to consider since the Guiding Principles were issued. The FCA highlights that the consumer understanding outcome is particularly relevant for AFMs providing ESG or sustainable funds; under this outcome, firms need to provide investors with the information they need at the right time and present it in a suitable way.

The Commission has clarified requirements for financial product classifications and the definition of “sustainable investment” under the SFDR.

By Paul A. Davies, Nicola Higgs, Michael D. Green, Anne Mainwaring, and James Bee

In April 2023, the European Commission (Commission) published a series of answers to questions that the European Supervisory Agencies (ESAs) had raised in September 2022 on the legal interpretation of certain aspects of the Sustainable Finance Disclosure Regulation (SFDR). The answers seek to clarify outstanding questions from stakeholders, including in relation to the definition of “sustainable investment” under the SFDR. Previous uncertainty with respect to this definition contributed to considerable market movement in the form of product re-classifications in the latter half of 2022.

The “AIFMD II” proposals continue their progress through the EU legislative process with more detail provided, but in many areas specific criteria will not be known until Level 2 measures are developed.

By Nicola Higgs, Jaime O’Connell, Denisa Odendaal, and Dianne Bell

On 9 February 2023, the European Parliament’s Economic and Monetary Affairs Committee (ECON) published a report on the amendments it has adopted to the European Commission’s legislative proposal for a directive (the Directive) amending the Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD) and Directive 2009/65/EC (UCITS Directive). The proposed new legislation arises out of the Commission’s AIFMD review and the identification of specific areas where the AIFMD framework could be improved, as well as the Commission’s view that a number of those issues were equally relevant for the activities of UCITS. As such, both directives will be amended to better align their requirements.

The European Securities and Markets Authority proposes to restrict ESG- and sustainability-related terms in the naming of funds, with an eye on the US and UK fund naming regimes.

By Paul Davies, Nicola Higgs, Anne Mainwaring, and Dianne Bell

On 18 November 2022, the European Securities and Markets Authority (ESMA) published its consultation paper on guidelines in relation to funds’ names, including quantitative thresholds that would need to be met before ESG- and sustainability-related terminology can be used in funds’ names. The proposed rules would set common standards for AIFMs[1] and UCITS[2] management companies when promoting AIFs and UCITS using an ESG- or sustainability-related name, including when these funds are set up as EuVECA, EuSEF, and ELTIFs[3] to facilitate marketing of funds throughout EU Member States.