FCA consults on wholesale AIFM overhaul: three-tier structure and new sourcebook by 2028 (CP26/28)

Action required. Discussion chapters (except prudential): 18 September 2026. Main consultation and prudential chapter: 14 October 2026.

The FCA published CP26/28 on 14 July 2026, opening a wholesale review of the UK alternative investment fund manager (AIFM) regime. The regulator is proposing to replace the entire framework that has sat largely unchanged since it was lifted from the EU's Alternative Investment Fund Managers Directive (AIFMD) at Brexit.

The headline change is a move from the current binary authorised/registered structure to a new three-tier framework of small, medium and large AIFMs, with obligations applied on a graduated basis proportionate to firm size and activity. The FCA notes that existing size thresholds have not kept pace with inflation or market growth, and that the rules are scattered across primary legislation, Treasury regulations and the FCA Handbook in a way that is hard to navigate.

To fix that fragmentation, the FCA proposes a new Alternative Investment Funds sourcebook (ALTS), which would consolidate most AIFM rules in one place, replacing the current patchwork that sits chiefly in the Investment Funds sourcebook (FUND).

The consultation covers UK-authorised and UK-registered AIFMs, firms marketing AIFs in the UK, depositaries, prime brokers and AIFM delegates. Residual collective investment scheme (CIS) operators and UCITS Management Companies should also review the prudential discussion chapter.

HM Treasury is running a parallel consultation on the underlying legislation, and the implementation date currently envisaged for the new regime is 2028. The FCA intends to publish a second consultation paper covering areas addressed only in discussion chapters in CP26/28, so firms should treat this round as the first stage of a multi-round process.

Two related consultations have been published alongside CP26/28: CP26/26 on fund reporting (FRAME) and CP26/27 on remuneration reform for solo-regulated firms. The FCA is also planning a prudential roundtable in September 2026 for firms that want to engage directly on that chapter.

For context, UK asset managers oversee almost £2 trillion in alternative assets and over £16 trillion in total assets under management, making the UK the second largest asset management market in the world.

Sources

• Cp26 28 uk aifm regimefca.org.uk
• Aifmdlexisnexis.com