On 21 May 2026, the Financial Conduct Authority (FCA) published a consultation paper in relation to the registration of authorised fund assets (CP26/16).

Summary

The FCA set out in CP26/16 that it considers that private markets (such as real estate, infrastructure, private credit and private equity) are vital to UK economic growth and the UK financial sector and, as a result, that it wants to preserve and promote authorised Alternative Investment Fund’s (authorised AIFs) practical ability to invest in private markets assets while continuing to protect their investors.

In light of this, the FCA are therefore proposing to change rules derived from the Alternative Investment Fund Managers Directive (AIFMD) with the effect that depositaries of authorised AIFs managed by full-scope Authorised Investment Fund Managers (AIFMs) are permitted to delegate to a third party their:

  • registration function under the Collective Investment Schemes Sourcebook (COLL) authorised fund rules (COLL registration function), for assets that are not safe custody investments or AIF custodial assets.
  • COLL registration function, and custody function under Client Assets Sourcebook (CASS) 6, for assets that are safe custody investments but not AIF custodial assets.

The FCA set out that this is because it considers that the relevant AIFMD derived provisions do not currently permit such delegations.

In addition, the FCA also proposes the following changes:

  • Where the assets are not defined as safe custody investments or AIF custodial assets (such assets include immovables such as real estate and partnerships that are not Collective Investment Schemes (CIS)), the proposed rule changes would allow these depositaries to delegate their COLL registration function to the AFM’s affiliates only, and it proposes new protections for the fund where this is done.
  • Where the assets are defined as safe custody investments but not AIF custodial assets, the rules changes would allow these depositaries to delegate their custody function under CASS 6 to a regulated third party (‘depositing assets’ with a third party).
  • Rule changes to align the COLL registration function rules for depositaries of authorised AIFs managed by ‘small’ AIFMs with those for the depositaries of ‘full scope’ authorised AIFs. However, the FCA does not propose changes to the COLL registration function requirements for the depositaries of UK Undertakings for Collective Investment in Transferable Securities (UCITS) funds as they do not face the same issues but propose a rule to confirm that a UCITS Manager cannot act as delegate for the depositary.
  • As depositaries are also subject to some of the custody rules in CASS 6, the FCA also sets out how relevant CASS 6 custody rules work and where applicable, how they interact with the COLL registration function rules and other provisions relevant for funds (including those derived from AIFMD/UCITS).
  • Small changes to the custody rules to clarify how they interact with funds provisions. These would be applicable to depositaries of UCITS and authorised AIFs, and some are also relevant for the depositaries of unauthorised AIFs. This paper also sets out our view on the AIF/UCITS custodial assets definitions.
  • That the Modification by Consent for COLL 5.6.22R (in respect of COLL 5.5.9R, on guarantees and indemnities) be replaced with a permanent rule change.

Next steps

The FCA has asked for feedback on its proposals by 9 July 2026.