MFA called on the Financial Conduct Authority (FCA) to amend its regulation surrounding capital requirements for investment firms in a consultation response. The FCA’s current model, which utilizes a one-size-fits-all philosophy, applies bank-style capital rules to all investment firms regardless of business model or capacity for systemic risk. MFA supports the FCA’s goal of simplifying the UK’s prudential framework but notes that alternative investment fund managers (AIFMs) are already subject to effective wind-down obligations and fiduciary duties, and imposing further requirements creates unnecessary costs, deters market entry, and reduces the UK’s competitiveness with other global financial centres.
