MFA submitted a comment letter to the Financial Conduct Authority (FCA) in anticipation of the repeal of the UK Securitisation Regulation (Sec Reg) inherited from the EU in the third quarter of 2023 and subsequent consultation on the next iteration of the Sec Reg. MFA’s letter proposes improvements to the UK regulatory framework for securitisation that would expand capital investments in the UK and optimise risk management on behalf of UK investors.
In the letter, MFA encourages the FCA to set the scope of its upcoming consultation as widely as possible to maximize the ability to create a more agile regulatory framework. Additionally, MFA’s letter emphasizes that the general due diligence requirements under the Sec Reg are redundant and ultimately inhibit alternative investment fund managers’ (AIFMs) global investment strategies. MFA calls on the FCA to remove AIFMs from the scope of due diligence requirements altogether as they are already subject to robust requirements under the Alternative Investment Fund Managers Directive (AIFMD).
MFA encourages the FCA to address these regulatory redundancies and enhance compatibility with the rules governing other jurisdictions with thriving securitisation markets, such as the US, empowering UK investors to better engage in global securitisation markets and compete on the global stage.