With geopolitical risks, increased competition and pro-growth agendas dominating the political landscape, FCA regulatory priorities for investment firms continue to evolve. Regulators remain under pressure to balance financial stability with economic growth, while sharpening their supervisory focus. Below, we explore the key regulatory themes investment firms should expect to see in the year ahead, and how these priorities are likely to shape supervision, policy and regulatory engagement.
Supporting Growth and Reducing Regulatory Burden for Investment Firms
Regulators remain under pressure to support their governments efforts to promote economic growth. The FCA has promised to reduce the regulatory burden, continuing to engage in areas such as transaction reporting. With great expectation, we also await the outcome of regulator’s review of the Senior Managers & Certification Regime (“SM&CR”) regime. In a continuing trend from last year, we also anticipate a reduction in regular data requests from the regulator as it attempts to focus on only collecting the data it needs to do its job.
Digital Innovation, Data and AI in FCA Supervision of Investment Firms
The FCA will continue to focus on transforming its supervision through richer data, analytics and digital engagement. Investment firms can expect more targeted supervisory engagement driven by better use of data returns and multiple source intelligence.
FCA Regulatory Priorities for Investment Firm Start-Ups and New Entrants
Helping new firms launch and raise capital will be a big focus in the UK. Announced in 2025, UK Government proposals for a provisional licencing regime for start-ups is one to watch. We also expect more detailed proposals covering the future regulation of alternative fund managers to be published with one focus being to reduce the barriers of entry for new firms.
Private Markets and FCA Regulatory Priorities for Investment Firms
Unlocking capital and liquidity in private markets will remain a hot topic for the regulator. While pro-growth initiatives, such as the Private Intermittent Securities and Capital Exchange System (“PISCES”), will remain on the agenda areas of potential risk to investor protection and market integrity will be a focus for the FCA. Investment firms can expect follow up supervisory activity following work conducted in 2025, such as the FCA’s multi-firm review of private market valuation practices. A focus on conflicts of interest, which has always been an area of heightened risk in private markets, is also expected.
Outcomes-Focused Regulation and FCA Expectations for Investment Firms
Firms can expect some rules to be re-written to give them more flexibility in how they achieve a positive end result for their investors. The FCA’s consultation on its client categorisation rules, released in 2025, is one such example. And yet, with great power comes great responsibility. In granting additional discretion to firms, the regulator will place even more emphasis on firms exercising good judgment in the best interests of their clients.
Financial Crime and Market Abuse: FCA Priorities for Investment Firms
The FCA has promised to continue its focus on assessment of AML systems and controls in its supervision. Market Abuse will also remain a focal point for the regulator as it uses enhanced tools and technologies to identify risks early.
Looking Ahead: What FCA Regulatory Priorities Mean for Investment Firms
The year ahead poses to be an exciting one. We anticipate the shift in tone from the regulator to continue. Moving towards a more outcomes focussed approach will be welcomed by many, but firms will need to remain alert to the importance of making good judgements. The industry will also need to keep in mind the regulator’s more targeted, technology-enhanced supervisory efforts. Firms will need to continue to maintain effective systems, controls and governance arrangements in a manner that meets the expectations of the regulator.
How Cosegic can help
Understanding FCA regulatory priorities for investment firms is essential to staying ahead of supervisory expectations. Alongside our advisory support, firms can use My Cosegic, our technology platform, to help track regulatory developments, manage compliance activity and maintain clear oversight of governance, risk and regulatory obligations.
If you would like to discuss how these priorities may impact your firm or how My Cosegic can support a more structured, efficient approach to compliance please get in touch to explore how Cosegic can help.
