2026 Regulatory Shifts: What UK Asset Managers Need to Know

A colleague recently suggested that, with the major ESMA-era rules, as well as Consumer Duty, SRD II, and Operational Resilience now largely implemented, the regulatory landscape feels unusually quiet. I couldn’t help but smile (spoiler alert; there’s a lot going on).

The year ahead marks a pivotal phase in the UK’s post-Brexit regulatory evolution; a shift from policy design to practical delivery. For asset managers, the emphasis moves firmly to demonstrating consistent, outcomes-focused application of the UK’s evolving principles-based regime, but there are also multiple new ‘simplification’ initiatives, which should keep Asset Managers busy in the short term, but ultimately make their lives a lot easier. 

A Note on the UK’s Regulatory Environment 

As we step into 2026, the UK faces a challenging landscape shaped by a complex mix of geopolitical and economic uncertainty, market volatility, and rapid technological advancement at a pace that is outstripping global regulators’ ability to monitor it. Against this backdrop, the UK must also strive to maintain its position as a leading global centre for asset management. 

In last year’s UK regulatory outlook blog, we discussed the UK government’s ambitious plan to stimulate growth by reforming the regulatory environment. In March 2025, the Financial Conduct Authority (FCA) set out its five-year strategy with a vision of deepening trust, rebalancing risk, supporting growth and improving lives.

To achieve this, the FCA highlighted its focus on four core priorities: 

• Being a smarter regulator by streamlining supervision, digitising authorisation processes, reducing unnecessary data burdens, and optimising technology. 
• Supporting economic growth through enabling investment, fostering innovation, and keeping the UK financial sector competitive globally. 
• Helping consumers navigate their financial lives by promoting transparent, fair products, boosting trust, improving access, supporting decision-making.
• Fighting financial crime by targeting fraudulent or harmful behaviour, and strengthening firms’ defences against money-laundering, scams and other risks. 

This was expanded in July 2025 under the Leeds Reforms and again in November 2025, at the Investment Association conference in Edinburgh, when FCA Chair Ashley Alder reinforced this vision, emphasising that “rebalancing risk” is central to the regulator’s future approach.

This aligns closely with the government’s wider economic goals, including encouraging households to move from saving predominantly in cash and increase their exposure to equity based long-term investment (good news for the asset management industry). 

Taken together, these strategies and statements all acknowledge risk as a necessary ingredient for investment, innovation, and long-term growth. The consistent message from policymakers and industry leaders alike is clear: boost retail participation, enhance the UK’s global attractiveness, and simplify regulation all while maintaining robust standards. 

Current Regulatory Trends 

Before we jump into the pipeline of new, it’s important to highlight key initiatives that have already landed and themes that will remain a central focus.  

Consumer Duty

The FCA’s strategy for 2025–2030 places Consumer Duty at the forefront. In the coming years, the FCA will focus on streamlining Consumer Duty while maintaining high expectations for consumer outcomes. 

What is Consumer Duty?

The Consumer Duty is a set of rules for financial services firms, introduced by the FCA, the financial services regulator. It sets a new standard for consumer protection, by requiring financial businesses in the UK to “act to deliver good outcomes for customers.”

The Consumer Duty introduced three cross-cutting rules for financial businesses: (1) act in good faith; (2) avoid causing foreseeable harm; (3) Enable and support retail customers to pursue their financial objectives

Source: Financial Ombudsman service

Operational Resilience

Operational resilience remains a priority, with the FCA expected to intensify supervisory scrutiny – particularly around data resilience, third-party oversight, and cloud dependency. Asset managers should prepare for more mature testing plans and empirical scenario testing, especially for fintech partners and outsourcing arrangements. 

Private Assets and LTAFs 

Long-Term Asset Funds (“LTAFs”) are becoming a core element of the UK government’s growth plan, channelling retail and overseas investment into private ventures. Non-UCITS Retail Schemes (“NURS”) and, as of April 2026, stocks & shares ISAs can now invest in LTAFs, expanding retail access to these long-term, illiquid investments. This area is expected to see increased regulatory scrutiny amid growth and cash inflows. 

Key Regulatory Changes to Watch Out for in 2026

The following highlights significant UK and EEA regulatory initiatives and updates scheduled for 2026. While not exhaustive, it offers a practical overview of the main actions that operational teams should consider integrating into their planning and processes. 

Key Updates to Watch Out for in 2026 

Beyond the many regulatory landing dates, compliance teams across the UK asset management sector should also remain alert to several potentially significant upcoming developments. 

Future Developments in Regulatory Change 

The UK regulatory landscape is moving into a period of refinement rather than expansion, ‘tweak’, more than ‘overhaul’. The FCA’s evolution into a more flexible, proportionate and outcomes-focused regulator is evident in multiple initiatives; from the streamlining of MIFIDPRU to the simplified reporting in the revised Stewardship Code and Transaction Reporting. The direction of travel signals a regulator that is seeking to intervene more intelligently, reduce unnecessary complexity, and shape rules that better reflect the size, business model and risk profile of firms. 

Simplification, accessibility and proportionality; despite the volume of change, many of the 2026 initiatives are designed to reduce regulatory burden rather than add to it. Streamlined templates, rationalised disclosure regimes, simplified permissions processes and clearer expectations should, over time, lower operational friction for asset managers.  

2026 is a year to consolidate, modernise and position for growth. Those who invest early in alignment, simplification and cross-regime coherence will be best placed to benefit from a more proportionate, internationally competitive regulatory environment. Citisoft can help firms translate complex regulatory change into clear, proportionate and commercially-focused action; from impact assessments and implementation planning to operating model design, governance uplift, and regulatory readiness support. 

See, I said there was a lot going on.