The FCA’s proposed alternative-fund regime would group managers around £750 million and £5 billion net-asset-value thresholds, while its separate FRAME project would simplify fund reporting. The remaining consultation sections close on 22 October, giving asset managers a final opportunity to test both the legal framework and the data needed to operate it.[1][2][4]
The projects perform different jobs. The AIFM reform would create a dedicated alternative-funds sourcebook and replace much of the inherited structure spread across UK legislation and the FCA Handbook. FRAME would change the forms, definitions and notifications through which firms report their activities. Most discussion chapters in the AIFM paper closed on 18 September; the later deadline applies to its consultation chapters and prudential discussion.[1][2]
Manager size moves to net asset value
How the proposed manager tiers would work
| Tier | Proposed size boundary | Regulatory approach |
|---|---|---|
| Small | £750 million NAV is the proposed transition threshold into the medium tier. | Baseline requirements, including valuation and custody safeguards.Source 4 |
| Medium | Between the small-firm transition and the £5 billion NAV upper threshold. | More detailed obligations, including depositary arrangements.Source 4 |
| Large | Above £5 billion NAV. | A more prescriptive governance and oversight regime, broadly equivalent to the current full-scope standard with modifications.Source 4 |
The FCA raised the proposed small-to-medium threshold from the £100 million floated in its earlier call for input to £750 million NAV. Its proposed calculation aggregates relevant AIFs and residual collective investment schemes, moving away from a leverage-based size measure. Leverage would still influence risk controls and supervisory reporting, while investor disclosure would also reflect the type of investor.[4]
Crossing a size threshold would require notification rather than an application to vary permissions. That would make growth easier to administer, although the larger category could bring additional obligations. The FCA proposes extra time for a small manager moving into the medium tier to appoint a depositary, recognising the work involved in custody arrangements and re-registering assets.[4]
FRAME changes the data pipeline
Current reporting and proposed FRAME
| Area | Current problem identified by FCA | Proposed direction |
|---|---|---|
| Forms | Different fund types report through separate and inconsistent requirements. | Consolidated forms designed around the fund and manager population.Source 2 |
| Notification requirements | Some notifications duplicate data or create low-value process. | Remove or reduce selected notifications where reporting can provide the information.Source 2 |
| Proportionality | Small funds can face reporting that is not aligned with their market impact. | Smaller funds would provide less data than larger or higher-risk funds.Source 2 |
| Data quality | Inconsistent definitions make cross-fund supervision harder. | Standardised data intended to identify valuation, liquidity, leverage and classification risks.Source 2 |
| Testing | Firms need time to map systems to new forms. | Further prototype forms are planned before the end of 2026.Source 2 |
The practical link between the projects is the fund inventory. Firms need a consistent record of which entities manage which funds, their classification, valuation, liquidity and leverage data, and the notifications those activities trigger. That record supports both the proposed size calculation and the revised reporting returns.[1][2]
Implementation and the cost case
Confirmed milestones and planning assumptions
| Date | Milestone | Status |
|---|---|---|
| 22 October 2026 | Response deadline for FRAME and remaining AIFM/prudential chapters | Consultation stage; not a rule commencement date.Source 1Source 2 |
| By end-2026 | Further FRAME prototype forms | FCA target for testing material.Source 2 |
| First half of 2027 | FRAME policy statement and final rules | Planned publication window; subject to consultation analysis.Source 2 |
| 2028 | Full FRAME implementation target and broader AIFM reform horizon | The FCA describes an aim, with exact commencement and transitional periods still to be set.Source 2Source 1 |
The FCA estimates sector savings of about £128 million a year from the package, much of it through streamlined reporting. Those are expected recurring savings across the sector. Firms would first incur transition work to interpret the classifications, map legacy fields, change controls and test revised submissions; their own net saving will depend on their business and existing systems.[3][1][2]
FRAME prototypes are due before the end of 2026, with a policy statement planned for the first half of 2027. The FCA envisages full implementation in 2028 and may bring some aspects forward where firms are ready. Final rules and the follow-up AIFM work will set the binding timetable.[2][1]
Sources & further reading
- CP26/28: The UK AIFM Regime Financial Conduct Authority · 14 Jul 2026 · Accessed 16 Oct 2026
- CP26/26: Fund Reporting for Asset Management Entities Financial Conduct Authority · 14 Jul 2026 · Accessed 16 Oct 2026
- Streamlined rulebook to save asset managers £128m a year Financial Conduct Authority · 14 Jul 2026 · Accessed 16 Oct 2026
- CP26/28: The UK AIFM regime Financial Conduct Authority · 14 Jul 2026 · Accessed 20 Oct 2026