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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
Pre-sale investment disclosures: on 2 July 2026, the FCA published a review of how well pre-sale investment disclosure documents work for consumers. The FCA published the findings in advance of the Consumer Composite Investments regime coming into force on 8 June 2027 to assist firms transition to new, clearer investment disclosure documents.
The FCA reviewed 132 pre-sale investment disclosure documents from manufacturer firms to see how easy they were to read. Of the 132 pre-sale disclosure documents reviewed, the FCA found that only 6% were written in plain English, with the rest scored difficult to read (31%) or fairly difficult to read (63%). The FCA also looked at the same documents and a further 40 pre-sale investment disclosure documents, from firms that both manufacture and distribute products, to see how easy they were to understand. The data revealed that word complexity was the main driver for the reduced intelligibility – likely due to: industry jargon, technical phrases and drafting choices.
Review of how well pre-sale investment disclosure documents work for consumers | FCA
MiFID costs and charges disclosures: on 2 July 2026, the FCA published its proposals for reformed MiFID costs and charges disclosures. The FCA’s proposals go beyond just disclosure obligations and also require changes to firms’ charging structures. Please see our articles below for further information.
Costs and charges reform: beyond the small print
CP26/24: Simplifying Consumer Investment Disclosures
Enforcement Watch: on 7 July 2026 the Financial Conduct Authority (“FCA”) published the second edition of its Enforcement Watch newsletter, which covers insights and themes from its enforcement work. This edition focuses on the FCA’s recent approach to supervising and enforcing the Consumer Duty. The FCA confirms that it has 11 investigations open examining potential breaches of the Consumer Duty including:
- an investigation into a firm in the wealth management sector centred around price and value, as well as consumer support; and
- an investigation into a small IFA over whether it breached the Consumer Duty by not carrying out or documenting assessments to ensure it provided fair value to its customers.
The FCA also reported that since the Consumer Duty was introduced, it has commissioned around 30 skilled person reviews which reference the Consumer Duty. The FCA also reported on other intervention measures including the use of VREQs for wealth managers, a fund manager and a financial advice firm.
Consumer Duty findings: on 10 July 2026, the FCA published its findings from its October 2025 review into firms' approaches to products and services. As part of this review the FCA conducted a qualitative survey of 38 firms from across banking, insurance, payments/e-money, asset management, consumer investments, funeral plans, and consumer finance. The review focused on the overarching requirements of the Consumer Duty for the products and services outcome across:
- product and service design and target market;
- testing, monitoring and review over the life cycle of a product or service;
- distribution and third parties; and
- customers in vulnerable circumstances.
Products and services: good practice and areas for improvement | FCA
Remuneration code reform: on 14 July 2026, the FCA published its consultation paper on reforms to the remuneration code for in-scope FCA solo-regulated firms. The proposals would replace the MIFIDPRU, AIFM and UCITS remuneration framework with one code. Please see our article here: FCA consultation on the reform of solo-regulated firms’ remuneration requirements | macfarlanes
CP26/27: Remuneration: Solo-regulated firms’ rules reform
AIFM reforms: on 14 July 2026, HM Treasury and the FCA issued a co-ordinated package of proposals to reform the UK's regime for alternative investment fund managers (“AIFMs”). Please see our article which discusses the key changes proposed: A new regime for UK AIFMs: a consultation on the FCA’s latest proposals in CP26/28 | macfarlanes.
Anti-money laundering: on 22 July 2026, the FCA published its findings of asset management and alternative firms’ financial crime controls. The FCA highlighted examples of good and poor practice in relation to: business wide risk assessments; customer risk assessments; CDD and EDD measures; ongoing monitoring; screening; and governance and training.
Asset management and alternative firms’ financial crime controls: our findings | FCA
Consumer Duty outcomes monitoring: on 27 July 2026, the FCA published good practice and areas for improvement it has identified from its review into firms' approaches to monitoring customer outcomes under the Consumer Duty. The FCA reviewed firms in various sectors, with a range of sizes and business models. The review assessed board reports and information requests, and surveyed 56 firms covering their strategy and framework; use of data/MI and testing; and governance, oversight and culture. Key findings related to:
- structured and coherent approaches;
- data-based decisions;
- monitoring across key stages of the customer journey; and
- governance and oversight that supports action and improvement.
The FCA found the strongest approaches were structured, evidence-based and focused on using monitoring to improve outcomes.
Outcomes monitoring: good practice and areas for improvement | FCA
Transaction reporting regime: on 3 August, the FCA published its policy statement (PS26/15) on changes to the UK transaction reporting regime. The government intends to repeal UK Markets in Financial Instruments Regulation and introduce a new, streamlined framework for transaction reporting. Key changes include:
- reducing the number of transaction reporting fields;
- removing reporting obligations for 7 million financial instruments which are only tradeable on European Union trading venues;
- removing foreign exchange derivatives from the scope of reporting requirements;
- reducing the default back reporting period from five to three years;
- exempting most corporate actions from reporting obligation.
The new rules will come into force on 3 April 2028.
PS26/15: Improving the UK transaction reporting regime
High-growth firms’ governance: on 10 August, the FCA published its review of good and poor practice from its review of a group of rapidly growing firms. The FCA engaged with 15 firms across asset management, wealth management and payments as part of a high-growth pilot. The FCA emphasised the importance of ensuring that governance, risk management and control frameworks keep pace with a firm’s growth and that arrangements remain appropriate for a firm’s size, scale and complexity. Good practice included:
- stronger arrangements to ensure governance, risk management and control frameworks kept pace with business growth;
- clear Board and Committee structures, with defined roles and responsibilities, regular oversight of risk and compliance matters, and high-quality management information;
- proper documentation of decisions, actions and challenge;
- strengthening governing bodies as a firm grows.
High-growth firms: good and poor practice | FCA
FOS policy statement on modernising the redress system: on 11 August, the Financial Ombudsman Service (“FOS”) published a policy statement on modernising the redress system, following its joint consultation (CP26/9) with the FCA in March. The statement confirms that the FOS will introduce a registration approach within its complaint handling framework. This approach aims to address delays and inefficiencies caused by cases progressing without the necessary core information. Under the new process, complaints will only be registered (and enter the registration stage) when they are ready to be investigated. The FOS will postpone implementing changes to the registration phase until its consultation on case fees is published later in 2026.
The FOS will also proceed with its proposals for an expanded set of grounds for dismissal, including clearer mechanisms to address complaints that are frivolous or vexatious. The “fair and reasonable” test in DISP 3.6.4R will be amended to clarify that FOS decisions are based on the standards applicable at the time of the act or omission complained about. These changes will take effect from 1 October 2026.
Modernising the Redress System: policy statement
T+1 settlement: on 13 August, the FCA published a blog post from Jamie Bell, Head of Capital Markets, discussing the UK’s move to a T+1 securities settlement cycle on 11 October 2027. Although some buy-side firms are making good progress, the FCA has concerns about buy-side sector readiness. The FCA states that it will take an ‘increasingly intrusive approach’ to supervision as October 2027 approaches, with clear expectations for participants to evidence their implementation of systems and process changes in project plans and consideration of their testing strategies.
T+1 Settlement: are firms ready for 2027? | FCA
Fund liquidity risk management: on 13 August, the FCA published its policy statement (PS26/17) setting out its final policy on enhancing fund liquidity risk management. The policy statement applies to authorised fund managers (“AFMs”) of UK UCITS schemes and non-UCITS retail schemes (“NURS”); MiFID investment managers where an AFM has delegated the portfolio management function of a UCITS scheme or NURS to them and depositaries of authorised funds. Key changes include:
- a requirement for authorised fund managers to have anti-dilution mechanisms available for use, together with policies and procedures governing their deployment;
- the introduction of guidance in new COLL 6 Annex 5, setting out expectations for effective liquidity risk management systems;
- new guidance on stress testing, as well as a requirement that UCITS scheme AFMs conduct liquidity stress tests under both normal and exceptional market conditions.
The new rules and guidance will come into force on 1 February 2027. There are transition provisions for some of the rules until 1 August 2027. The FCA is separately consulting on the liquidity risk management framework for AIFMs of unauthorised AIFs.
PS26/17: Enhancing fund liquidity risk management
Wealth management survey: on 18 August, the FCA published the findings of its wealth management survey, which covers data from 400 firms, supplemented by regulatory returns and other FCA and public data sources. The FCA highlights the scale and importance of the wealth management sector, noting that wealth management firms support more than 5.5 million retail clients and manage almost £1 trillion of assets.
Key findings include:
- AI: 13% of firms used in-house or third-party AI tools. This rises to 45% when firms considering adopting AI within the following 12 months are included. The FCA notes that AI use can increase risks around fraud, cyber security and client harm.
- Outsourcing: More than 92% of firms outsource part of their business. The FCA highlights that reliance on third parties creates dependencies.
- Financial crime: The FCA flags concerns about financial crime controls, noting that:
- all firms now refresh their KYC checks, an improvement from 2023/24 when 8% of firms responded that they do not refresh their KYC checks at all;
- 6% of firms do not check whether their clients are PEPs; and
- 7% of firms do not carry out sanctions screening.
- Vulnerability: 83% of portfolio management firms reported identifying at least one client with characteristics of vulnerability in 2024/25, up from 68% in the first survey. Around 36% of these clients had their services adjusted, such as tailored communications.
Wealth management survey report – 2026 | FCA
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