FCA Urged to Overhaul Capital Rules for Alternative Investment Managers

The Managed Funds Association (MFA) has called on the UK''s Financial Conduct Authority (FCA) to abandon its bank-style capital requirements for alternative investment fund managers (AIFMs). The current framework, which applies uniform rules across all investment firms, fails to account for the distinct risk profiles of asset managers and could undermine London''s competitiveness as a global financial hub.

Unlike banks, AIFMs do not accept deposits or benefit from government backstops. Their business models—investing long-term capital on behalf of professional clients—pose minimal systemic risk. Jillien Flores, MFA''s Chief Advocacy Officer, argues that tailored regulations WOULD strengthen UK markets while maintaining stability: "One-size-fits-all requirements ignore fundamental differences in how alternative asset managers operate."