Welcome to the latest edition of our investment management update.
This publication has been tailored to highlight topical news, cases and changes in the law impacting the investment management sector.
UK
- On 31 March, the FCA launched its new portal called “My
FCA”. The portal is for registered and authorised firms and
provides a single sign-on service to access RegData, Connect and
the FCA's Online Invoicing System. The portal also shows any
RegData and Connect scheduled tasks in one place with a due date
and status. The FCA has confirmed that it is not mandatory to sign
in via My FCA following the launch and all systems may still be
accessed in the usual way.
My FCA | FCA
FCA launches new portal making reporting easier | FCA
Regulation round-up - March 2025
- On 28 March 2025, the FCA published Handbook Notice 123.
Amendments to the FCA Handbook included, amongst others, that the
FCA is moving from a flat fee to a variable-rate fee for principal
firms. The FCA has confirmed that this will not in itself result in
a material change to the amount that principal firms are required
to pay per appointed representative or introducer appointed
representative that they are responsible for.
Handbook Notice 128
- On 28 March 2025, the FCA's chief executive, Nihkil
Rathi, delivered a speech at the JP Morgan Pensions and Savings
Symposium 2025. The speech focused on the advice gap and stated
that, “It is no exaggeration to say that we want our
Advice Guidance Boundary Review to trigger an advice
revolution.” To address the gap, he discussed the
FCA's proposed new model called “Targeted
Support” as well as pensions dash boards. Mr Rathi explained
that the FCA will in partnership with the Treasury consult on the
Targeted Support model, which will aim to fill the gap between
generic factual guidance and regulated advice for pensions and
investments. The speech also confirmed that the FCA is looking to
test what it might look like in practice and that 12 firms have
been given until next month to design, build and test the consumer
facing element of a cash to equity Targeted Support journey.
On the right track: Connecting consumers, products and growth | FCA
- On 25 March 2025, the FCA published a feedback statement
addressing immediate areas for action and further plans for
reviewing FCA requirements following the introduction of the
Consumer Duty and last July's call for input in which the FCA
sought to review FCA requirements following the introduction of the
Consumer Duty. The feedback statement sets out the FCA's
programme of action to simplify its requirements of firms in
connection with the Consumer Duty. It included, amongst others,
confirmation that the FCA: (i) plans to consult on changes to the
requirement for asset managers to report annually on their value
assessments, (ii) will consult on updating requirements in the
Client Assets Sourcebook in relation to amending record-keeping
requirements for certain due diligence relationships and (iii) will
engage with firms to consider how to provide more clarity on
Consumer Duty expectations for firms in retail distribution chains.
The FCA has confirmed that a further statement outlining the
FCA's programme of work and progress will be published in
September 2025.
FS25/2: Immediate areas for action and further plans for reviewing FCA requirements following introduction of the Consumer Duty
- On 25 March 2025, the FCA launched its new 5-year strategy. The
FCA has stated that it will focus on four priorities: to be a
smarter regulator; to support sustained economic growth; to help
consumers navigate their financial lives; and to fight financial
crime.
FCA launches 5-year strategy to support growth and improve lives | FCA
Our strategy 2025 to 2030
- On 18 March 2025, His Majesty's Treasury published a
draft statutory instrument (SI), and corresponding policy note,
revoking the detailed firm-facing regulations contained within the
Markets in Financial Instruments Directive Organisational
Regulation (MiFIDOrgReg) which will instead be placed into the FCA
and PRA rulebooks. The policy note explains that the
Government's intention is to not change the substance of the
existing requirements. Instead, the delegation of responsibility to
UK regulators is to allow for more informed and swifter regulatory
updates to reflect changing markets. The Treasury confirms its
intention to commence the SI as well as the revocation of the MiFID
Org Reg and other related legislation following publication of
final FCA and PRA replacement rules in H2 2025, in line with the
regulators' replacement rules.
Markets in Financial Instruments Directive Organisational Regulation – Draft Statutory Instrument and Policy Note - GOV.UK
- On 17 March 2025, His Majesty's Treasury published a
policy paper, “New approach to ensure regulators and
regulation support growth.” The paper sets out four key
actions:
Key proposals in connection to the financial services include: (i) reviewing the number of the FCA's “have regards” to identify opportunities to rationalise them and ensure a focus on their priorities, (ii) the Economic Secretary conducting a review of the Financial Ombudsman Service to determine if it is delivering its role as intended; and (iii) a package of measures to enable the FCA to support early-stage innovative firms that are starting to conduct regulated activities.
New approach to ensure regulators and regulation support growth - GOV.UK
- Action 1 to tackle the complexity and burden of regulation;
- Action 2 to reduce uncertainty across the regulatory system; and
- Action 3 to challenge and shift excessive risk aversion in the system.
- On 11 March 2025, the FCA published a statement outlining its
position on sustainability regulation and UK defence. The statement
confirmed that the FCA's rules, including those related to
sustainability, do not prevent investment or finance for defence
firms or require financial institutions to treat defence companies
differently.
Our position on sustainability regulations and UK defence | FCA
- On 11 March 2025, the FCA confirmed in a letter to the Treasury
Select Committee that it has shelved its highly criticised
proposals to publicise live enforcement investigations. The FCA
does however still plan to issue a final policy statement by the
end of June which will include the FCA's final rules for
greater transparency regarding its enforcement actions. The policy
statement will set out the FCA new rules for: (i) reactively
confirming investigations already in the public domain (for
example, following market announcements or other disclosures made
by firms themselves or sometimes announcements by a partner
regulator); (ii) making public notifications which focus on the
potentially unlawful activities of unregulated firms and regulated
firms operating outside the regulatory perimeter; and (iii)
publishing greater detail of issues under investigation on an
anonymous basis (for example, via a regular bulletin such as
“Enforcement Watch”).
In the same letter, the FCA provided an update on its proposals regarding non-financial misconduct (NFM) and diversity and inclusion (D&I) following its previous consultation in 2023 (CP23/20: Diversity and inclusion in the financial sector – working together to drive change). On NFM, the FCA confirmed that it will set out its proposals by the end of June. The FCA explained that it was taking more time than initially intended to appropriately reflect the current changing legislative landscape.
The FCA also confirmed that it does not intend to publish new rules on D&I and will not proceed with its proposals regarding D&I data collection in accordance with the Treasury Select Committee's recommendation. The FCA explained its changed stance in light of wanting to avoid duplication and unnecessary costs given its recognition of a very active policy and legislative agenda, including on employment rights, gender action plans and disability and ethnicity pay gap reporting.
Naming and shaming: FCA backtracking and residual uncertainty - Macfarlanes
Update on the FCA's enforcement transparency proposals | FCA
Our letter to the Treasury Select Committee on the FCA's enforcement work and diversity & inclusion
- On 7 March 2025, the FCA published the findings of its review
into firms' approaches to the consumer support outcome of the
Consumer Duty and set out areas of good practice as well as areas
for improvement. The review was conducted in two stages: an initial
quantitative survey in May 2024 which received 356 responses from
retail financial services firms across multiple sectors; and a
subsequent information gathering exercise covering a sample of 40
firms in September 2024. The FCA's review focused on the
support being provided to customers across four areas: meeting
customers' needs; access to support; culture, governance and
accountability; and outcomes monitoring.
Consumer Support Outcome: good practices and areas for improvement | FCA
- On 7 March 2025, the FCA published the findings of its review
of firms' treatment of customers in vulnerable circumstances
and examples of good practice and areas for improvement. The FCA
also evaluated its February 2021 guidance for firms on the fair
treatment of vulnerable customers (FG 21/1) (the Guidance). The FCA
confirmed that it was not revising the Guidance or introducing new
requirements for firms on the understanding that stakeholders had
made clear that the Guidance was still useful and important under
the Consumer Duty.
Firms' treatment of customers in vulnerable circumstances – review | FCA
Delivering good outcomes for customers in vulnerable circumstances – good practice and areas for improvement | FCA
- On 5 March 2025, the FCA published the results of its review of
private market valuation practices. The review is relevant to all
firms that hold investments in private assets, including private
equity, venture capital, private debt and infrastructure assets as
well as UCITS funds when holding assets subject to Level 2-3
valuations. We have written about the review of the private market
valuation practices below:
Private market valuation practices - Macfarlanes
Private market valuation practices | FCA
Europe ex UK
- On 5 March 2025, the European Commission issued a notice
responding to various frequently asked questions (FAQs) on the
Taxonomy Environmental Delegated Act ((EU) 2023/2486), the Taxonomy
Climate Delegated Act ((EU) 2021/2139) and the Taxonomy Disclosures
Delegated Act ((EU) 2021/2178). The notice included FAQs on,
amongst other items, the objectives of climate change mitigation
and climate change adaptation, as set out in Annexes I and II to
the Taxonomy Climate Delegated Act.
European Commission notice (C/2025/1373)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
