Welcome to the September 2026 edition of our Investment Firms Newsletter.
August 2026 saw a broad range of regulatory developments affecting UK investment firms, fund managers and firms with EU or US exposures. In the UK, the FCA progressed reforms across transaction reporting, IPO information flows, fund liquidity management, T+1 settlement, AIFM and FRAME reporting, Consumer Duty outcomes monitoring and governance expectations for high-growth firms.
In the EU, developments focused on the Retail Investment Strategy, strengthened best-execution requirements and proposed changes to EMIR bilateral margin rules, while US regulators advanced a number of significant initiatives affecting private fund managers, including enforcement activity, an extension to the Form PF compliance deadline, new proposals for crypto assets and potential CFTC registration relief for certain SEC-registered investment advisers.
Firms should review the developments relevant to their business models and ensure regulatory change programmes, governance arrangements and implementation plans remain aligned with forthcoming deadlines and supervisory expectations.
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UNITED KINGDOM.
FCA finalises reforms to UK MiFIR transaction reporting
On 3 August, the FCA published PS26/15, finalising changes intended to simplify the UK transaction-reporting regime. The number of reportable fields will fall from 65 to 52; reporting will be removed for around seven million instruments that are tradable only on EU venues and for foreign-exchange derivatives; and the default back-reporting period will fall from five years to three. The revised regime takes effect on 3 April 2028, with a draft schema, validation rules and reporting guidelines expected in October 2026. The FCA has also adopted a more flexible supervisory approach to certain existing reporting issues from August 2026.
MiFID firms should start an impact assessment covering their reportable-instrument population, current reporting fields, transaction-reporting logic, data sources and arrangements with approved reporting mechanisms and technology providers. Firms should not remove existing reports solely on the basis of the policy statement before the relevant legal changes take effect, but should identify potential data and cost savings, allocate an implementation owner and prepare to review the October technical materials.
FCA changes information flows for UK Equity IPOs
On 5 August, the FCA published PS26/16, removing the requirement for a seven-day gap between publication of an approved registration document or prospectus and the publication of connected research. Publishers of connected research are also no longer required to provide unconnected analysts with the same information. The reforms affect issuers, investment banks, brokers, investment advisers, independent research providers, sponsors, institutional investors and other IPO intermediaries.
Firms involved in UK IPOs should revise transaction timetables, research protocols, analyst-access procedures and engagement letters. Compliance teams should ensure that the greater flexibility does not weaken controls over inside information, wall-crossing, research independence, conflicts of interest, selective disclosure or the fair treatment of research recipients. Buy-side firms should similarly update their processes for receiving, assessing and recording connected research.
FCA publishes expecations for high-growth firms
The FCA published findings from a pilot involving 15 firms across asset management, wealth management and payments. Good practice included governance and control frameworks that developed alongside the business, clear committee responsibilities, effective board challenge, high-quality management information, documented risk appetite and key risk indicators, and forward-looking regulatory planning. Weaknesses included governance lagging behind growth, key-person dependency, insufficient risk resources, weak records of challenge, inadequate third-party and artificial-intelligence risk management, and policies or suitability processes that had not kept pace with changing target markets.
Newly authorised, rapidly growing or materially changing firms should undertake a board-sponsored “growth readiness” review. This should cover governance mapping, board and committee information, risk appetite, compliance and risk staffing, succession and key-person dependency, outsourcing and AI use, financial resources, ICARA and wind-down planning, and whether product, client and suitability policies continue to reflect the firm’s actual business.
FCA strengthens liquidity-risk management for authorised funds
PS26/17, introduces final rules and guidance for UK authorised fund managers of UCITS and non-UCITS retail schemes. The package addresses the design and operation of anti-dilution tools, liquidity assessments and stress testing. It is also relevant to MiFID investment managers to which portfolio management has been delegated and to fund depositaries. The main rules take effect on 1 February 2027, with transitional provisions until 1 August 2027 for specified prospectus amendments and eligible-market arrangements. The authorised fund manager remains ultimately responsible where functions are delegated.
Affected firms should complete a fund-by-fund gap analysis covering swing pricing, dilution levies, thresholds, governance and escalation, liquidity classifications, stress scenarios, management information and record-keeping. AFMs should agree an implementation plan with delegated managers, administrators and depositaries, identify prospectus changes and ensure that boards can evidence review and approval before the February 2027 effective date.
FCA extends AIFM and FRAME consultation deadlines
Although the underlying consultations were published in July, the FCA materially updated them on 27 and 28 August. The deadline for the main AIFM consultation, draft rules and prudential discussion chapter is now 22 October 2026, while responses on certain other discussion chapters remain due by 18 September 2026. The proposals include a three-tier small, medium and large AIFM regime and a new ALTS sourcebook. The Fund Reporting for Asset Management Entities, or FRAME, consultation also now closes on 22 October and proposes consolidated, proportionate reporting for UK AIFMs, UCITS managers, certain MiFID firms and third-country AIFMs marketing under the national private placement regime. Implementation is currently envisaged for 2028.
Firms should manage the AIFM and FRAME proposals as one coordinated regulatory-change project. Immediate work should include assessing the firm’s likely tier, reviewing governance, delegation, valuation and prudential consequences, and mapping current FUND, Annex IV, national private placement and other reports against the proposed FRAME data. Firms intending to respond should distinguish the 18 September chapters from those closing on 22 October.
FCA identifies good and poor practice in Consumer Duty outcomes monitoring
The FCA published the findings of its review into how firms monitor outcomes under the Consumer Duty. Stronger firms clearly defined what good and poor outcomes looked like for individual products and at each stage of the customer journey, linked those outcomes to meaningful data and thresholds, and maintained an audit trail showing how management information led to decisions, remediation and measurable improvements. Areas for improvement included excessive reliance on high-level operational or lagging indicators, unexplained thresholds, limited analysis of outcomes for different customer groups—including customers in vulnerable circumstances—and insufficient testing of whether remedial action had actually worked.
Firm’s whose products or services fall within the Consumer Duty should review whether their outcomes-monitoring framework provides evidence of actual customer outcomes rather than merely reporting activities or process completion. Firms should define expected outcomes by product, target market, distribution channel and journey stage; document the rationale for thresholds; analyse complaints, withdrawals, service failures and vulnerability data; and ensure that boards or relevant committees can trace identified issues through to action, accountable ownership and post-remediation testing. Manufacturers should also confirm that they receive sufficient information from distributors and other firms in the distribution chain.
FCA enforcement emphasises conflicts and customer interests
On 19 August, the FCA banned the former chief executive of SVS Securities from senior-management roles and imposed a £56,400 fine. The FCA found that he had failed to manage the firm’s discretionary fund-management activities in customers’ interests. The case concerned investment of pension assets in high-risk products while the firm received significant payments from issuers, together with a 10% reduction applied when customers sold certain bonds that was not clearly explained and generated substantial income for the firm.
EUROPEAN UNION.
EU Retail Investment Strategy moves into detailed rulemaking – EU MiFID firms, UCITS managers and AIFMs
ESMA published the European Commission’s request for technical advice on implementing amendments under MiFID II, UCITS and AIFMD. The mandate covers value-for-money and product-governance processes, product peer groups, costs and performance, inducements, suitability and appropriateness, simplified advice, marketing through digital channels and third parties, and controls for identifying and reimbursing undue fund costs. The request is part of the continuing legislative and Level 2 process and does not itself create final operational requirements.
EU facing firms should begin a proportionate readiness assessment rather than implementing unfinalised rules. Priority areas include product-cost and performance data, potential peer-group comparisons, inducement inventories, suitability journeys, marketing approvals, written arrangements with promoters or financial influencers, records of digital communications, and governance for identifying and reimbursing undue costs.
New EU best-execution standards reach their August legal milestone
Commission Delegated Regulation (EU) 2026/825 entered into force on 12 August and will apply 18 months after entry into force. The Regulation establishes more detailed criteria for preparing and assessing order-execution policies, including the categorisation of financial instruments, selection and monitoring of execution venues, the use of reliable market and reference data, and fair-price checks for over-the-counter and bespoke instruments. It will replace the existing RTS 27 and RTS 28 delegated regulations when it becomes applicable.
European Supervisory Authorities propose bilateral-margin simplification – EU derivatives counterparties
On 3 August, the European Supervisory Authorities published draft amendments to the bilateral-margin requirements under EMIR. The proposal would remove the obligation to exchange initial margin on both new and existing contracts where counterparties are within the initial-margin regime but fall below the €8 billion threshold. Under the current rules, the exemption applies to new contracts but can leave legacy contracts subject to margin exchange. The draft must still be considered by the European Commission and is not yet applicable law.
UNITED STATES.
SEC private-fund case highlights principal transactions, fees and registration – US facing private-fund advisers
On 10 August, the SEC charged Adit Ventures Management, its chief executive and affiliated general partners in connection with alleged misconduct involving pre-IPO investments. The SEC alleged, among other matters, unauthorised loans involving fund assets, purchases followed by sales to funds at higher prices without appropriate principal-transaction consent, misleading statements about acquisition cost, unauthorised fees, pledging client assets to support a credit facility and failure to register as an investment adviser. The defendants consented to a proposed judgment, subject to court approval, without admitting or denying the allegations.
SEC and CFTC extend the Form PF compliance date – SEC-registered private-fund advisers
On 31 August, the SEC and CFTC adopted a joint final rule extending the compliance date for the 2024 Form PF amendments from 1 October 2026 to 1 July 2027. The extension applies to advisers that would be required to file under the amended form, including relevant advisers also registered as commodity pool operators or commodity trading advisers. Firms may continue using the current Form PF while the agencies consider separately proposed 2026 changes that could further streamline the reporting framework.
Affected managers should update project plans, budgets and vendor delivery dates, but should not dismantle implementation work already completed. The additional period should be used to improve data ownership, lineage, aggregation, reconciliation and control testing, while maintaining scenario plans for both the adopted 2024 amendments and any subsequent changes arising from the 2026 proposal.
SEC Proposes New Regulation Crypto Assets
August 2026, the SEC has proposed a tailored framework for crypto-related investment contracts that aims to support US innovation and capital raising while maintaining investor protections. Key proposals include:
- A one-time registration exemption for offerings of up to $5 million over four years.
- A second exemption allowing offerings of up to $75 million in any 12-month period, with financial statements and ongoing reporting required.
- Principles-based disclosures to investors under both exemptions.
- A conditional safe harbour under which a crypto asset would no longer be treated as subject to an investment contract once the issuer completes or permanently stops its promised essential managerial work.
- Federal pre-emption of certain state securities registration requirements, including for qualifying offerings and some secondary-market transactions.
The proposal builds on the SEC's March 2026 guidance and is intended to clarify when crypto assets are governed by federal securities laws, encourage issuers to operate in the US rather than offshore, and provide stronger, consistent investor protections. The public comment period lasts 60 days after the proposal is published in the Federal Register.
CFTC Proposed to Codify Commodity Pool Operator Registration Relief for SEC-Registered Investment Advisers
On August 18, 2026, the U.S. Commodity Futures Trading Commission (CFTC) approved a notice of proposed rulemaking (the Proposal) that would amend part 4 of the CFTC’s regulations to:
- Reinstate the commodity pool operator (CPO) registration exemption under CFTC Rule 4.13(a)(4) (the Proposed RIA-QEP Exemption) for certain investment advisers registered with the Securities and Exchange Commission (SEC) (RIAs), substantively codifying CFTC No-Action Letter 25-502 (Letter 25-50 or the Letter), with important modifications.
- Restore the related exemption from commodity trading advisor (CTA) registration under CFTC Rule 4.14(a)(8) for advisors to pools operated pursuant to CFTC Rule 4.13(a)(4).
- Increase the aggregate gross capital contributions threshold in the CPO registration exemption for small commodity pools under CFTC Rule 4.13(a)(2) (the Small Pool Exemption) from $400,000 to $800,000.
The primary beneficiaries of the Proposal will be SEC-registered private-fund advisers whose client base consists of “qualified eligible persons” (QEPs), and whose commodity interest trading activity exceeds the CFTC Rule 4.13(a)(3) de minimis exemption thresholds or whose investment strategy otherwise makes them ineligible to claim an exemption under CFTC Rule 4.13(a)(3).
CPO registration exemption under CFTC Rule 4.13(a)(4) that could be claimed for each “Eligible Pool” if:
- the person claiming the exemption is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940;
- the pool interests are exempt from registration under the Securities Act of 1933 and are offered and sold without marketing to the public in the United States, except that the public-marketing restriction would not apply to a pool also offered under SEC Rule 506(c);
- the person reasonably believes, at the time of investment, or, for an existing pool, when the pool converts to exempt status, that each participant is an “Eligible Participant,” as described below; and
- the person files Form PF for the pool, if applicable regulations require that filing.
The Proposal was published in the Federal Register on August 21, 2026.
