On 5 November 2024, the Financial Conduct Authority (FCA) published a consultation paper, CP24/21, on investment research payment optionality for fund managers.

CP24/21 sets out proposals to take forward the recommendations of the Investment Research Review and feedback to the FCA’s previous consultation (CP24/7) on payment optionality for investment research. The FCA finalised rules in July 2024 allowing institutional investors more flexibility in paying for investment research, and following feedback from industry, it is now proposing to extend the new payment optionality to pooled funds, to make it operationally more efficient for asset managers of different business models and sizes to take up the new payment option to pay for investment research.

The proposals will apply to UCITS management companies, full scope UK alternative investment fund managers (AIFMs), small authorised UK AIFMs and residual collective investment scheme operators, and an investment platform provider.

Next steps

The deadline for responses to CP24/21 is 16 December 2024.

The FCA says it will consider all feedback and, if it chooses to proceed, it will aim to publish any rules or guidance in a policy statement in H1 2025.