Dear Clients and Friends,
Over the past couple of months, the FCA has been busy setting the tone for the next few months. From the Dear CEO Letter directed at asset managers and with clear private markets messaging, to its updated five-year strategy and 2025/26 Annual Work Programme, there’s no shortage of signals about where the regulator’s focus lies.
In our view, the messaging is clear: the FCA expects firms to be proactive, data-informed and resilient, with strong governance and culture running through it all. Add to that the launch of MyFCA, continued enforcement activity, and a call for input on the future of the AIFMD regime, and it’s clear that the intention is to enable a smarter regulatory environment that supports growth and competitiveness.
All of this sits alongside a strategy of ‘no-news news’. Now more than ever there are publications of news that, on first glance are meaningful, but on closer inspection seem to be particularly minor in nature. See ‘Definition of Capital’ below as a great example of hopes of meaningful sensible change being quickly dashed. Those tasked with keeping up with evolving regulatory announcements face the dual challenge of identifying what’s most relevant to their firm while also managing expectations internally around the transformative changes indicated in headlines.
We hope the update below—along with our regular posts and insights—helps make your latest challenges more manageable. Our aim is to keep you informed with clear, practical guidance that reflects the latest industry trends, regulatory developments, and best practices.
To stay up to date with regulatory updates, we invite you to visit our website at juddadvisory.com and follow our LinkedIn page. For more information on SEC updates, our partners at HighCamp Compliance provide quarterly and periodic updates. You can check out the latest news on their website.
- Dear CEO: Asset Managers & Alternatives
The FCA’s latest Dear CEO Letter for asset managers and alternatives covers a lot of ground, but much of it will feel familiar. Valuation, financial crime, conflicts, and operational resilience all make repeat appearances, with a noticeable spotlight on private markets this time around. While we don’t think this signals a wave of new rules or an uptick in supervision, it does feel like the FCA is narrowing in on areas where they expect firms to be sharper and more accountable. Our view is to use this as a prompt to revisit the basics: documentation, governance, and ownership of risk, and be ready in case your firm ends up on the receiving end of one of the FCA’s thematic reviews. Read our full breakdown here.
- FCA Five Year Strategy
The five-year strategy has historically been a non-event cycling through the same topics. It centres around the FCA’s four key priorities, which, overall, echo a political call to action and shift towards a more business-friendly and enabling regulator, with a clear focus on growth and competitiveness.
The first two priorities, being a smarter regulator and supporting sustained growth, go hand in hand, and together they reinforce the FCA’s secondary objective of facilitating international competitiveness and growth. On the smarter regulation front, the FCA is focused on streamlining its processes: digitising and simplifying the authorisation process, reducing follow-up from case officers, and scaling back the volume of data returns, with a sharper focus on collecting the data it actually intends to use. This leads us to the heralded “My FCA” – the one stop gateway to the FCA….
- My FCA
During the first part of the year there was a small but significant step forward in digitisation with the FCA’s new portal, My FCA, which quietly launched on 31 March. While it sounds like some form of social media platform, firms can now log in once to submit data, pay fees and track deadlines without jumping between different systems. It’s a small win —an improvement, but not as meaningful as the promised reduction in regulatory returns might have been….
- Reduction in Regulatory Returns
In our New Year letter, we asked the Judd team to flag returns they thought could be removed and invited our LinkedIn community to vote in a poll. While responses were split across the four options, ‘Volumes & Business Type’ came out on top with 38% of the vote. Interestingly, the FCA’s recent consultation paper suggests it might instead decommission FSA039: Client Money and Assets, arguably one of the simplest returns, particularly as most of our clients aren’t permitted to hold client money in the first place. We remain hopeful that some of the more futile returns that do not provide any useful supervisory date will over time disappear.
- 2025/2026 FCA Work Programme
It’s a similar story in the recently published 2025/26 Work Programme, which largely sticks to the same script. There’s a consultation on reducing regulatory returns (see above for the first instalment of this), new ‘flexi collections’ being added to RegData for more targeted asks, and more talk of digitising the authorisation process. The flexi collections concept, despite the name, could be a helpful evolution because it is not always clear where and how firms should provide non-standard reporting to the FCA especially when seeking to communicate in an open manner with the FCA under the broad Principle 11. The supervision model is also being reviewed with the FCA, looking at how firms are categorised and who really needs hands-on supervision. It’s all part of the same story, the regulator that is trying to be more agile and less bureaucratic in how it regulates.
- Enforcement Cases
However, none of these priorities has softened the FCA’s stance on financial crime. In fact, over the past two years, the regulator has charged more individuals with criminal offences than ever before and is wrapping up enforcement investigations at a faster pace.
One recent case that stands out is one individual, who was banned from doing any regulated activity by the FCA last month. They had been FCA approved but were caught up in a scheme where false documents were submitted to HMRC as part of a VAT fraud. An 8 month prison sentence on each count has now been handed down.
The FCA’s decision to issue a prohibition order drives home how seriously they take integrity in the industry. The message is clear… while the FCA is dialling up its focus on competitiveness, it’s not at the expense of robust enforcement.
There have been a few newer cases to reference for SMCR and annual compliance training so it’s worth digging out slides and giving them a refresh this year. We all know the enforcement cases are the most interesting section for those attending.
- Valuation Thematic Review Findings
From rumours of a thematic review, to rumblings of an extensive questionnaire we have now received the findings of the multi-firm review of valuation processes for private market assets. You wouldn’t be mistaken in thinking that, between this and the recent portfolio Dear CEO letter, private markets are taking centre stage for this corner of the financial services industry and whilst the limelight might be uncomfortable, the findings aren’t particularly revolutionary. We have been discussing these findings where relevant with clients and can discuss practical next steps and considerations. The key messaging is documentation is vital, and conflicts of interest is top of mind for the FCA in all its interactions.
- Definition of Capital for Investment Firms
This consultation CP25/10 – Definition of capital for FCA investment firms, on a first glace looked like a material and very welcome change to prudential requirements. However it does not require, propose, or envisage any change to the capital or capital requirements of existing firms (assuming, of course that they are adequately capitalised already). It may however be pertinent to those firms considering changing their capital structure in the future and to applicant firms.
- UK AIFMD
We asked our LinkedIn community on their views on the FCA Call for Input on its intended direction for changes to the regulatory framework for AIFMs. 56% of respondents are cautious as to the detail that will emerge for what this truly means for the industry which we fully agree with given the ‘no-new, news’ trend emerging from the FCA. The full consultation isn’t expected until early 2026.
If you’re looking for more information or need help navigating the topics covered, don’t hesitate to reach out at judd@juddadvisory.com or contact your regular Judd consultant.
