Reform would help UK firms compete for global talent
London, UK — MFA welcomed the Financial Conduct Authority’s (FCA) proposals to reform the remuneration regime for solo-regulated asset managers and investment firms in a letter submitted today. MFA supports the FCA’s move away from detailed, prescriptive requirements toward a more outcomes-focused framework.
“Asset managers compete globally for investment talent,” said Jillien Flores, MFA Chief Advocacy Officer. “The FCA’s reforms create a simpler, outcomes-focused framework that will help the UK attract talent and investment while maintaining strong standards.”
A genuinely outcomes-focused framework would set clear standards while giving firms flexibility in how they meet them. Firms could structure remuneration around their business models and risks instead of complying with rigid requirements derived from banking regulation. Global firms could also use existing remuneration arrangements where they meet the FCA’s objectives, reducing unnecessary UK-specific cost and complexity. That flexibility would help UK firms compete for global talent, strengthening London’s position as a leading asset management centre.
The letter also encouraged the FCA to consider whether a dedicated remuneration code remains necessary for wholesale asset managers. The UK is an outlier among major international financial centres in applying a standalone remuneration regime to non-bank asset managers serving professional investors. Other conduct, governance, and risk-management requirements already address its underlying objectives.
Read the full letter here.
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About the global alternative asset management industry
The global alternative asset management industry — including hedge funds, private credit funds, and hybrid funds — serves thousands of public and private pension funds, charitable endowments, foundations, and other global institutional investors. The industry provides portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets throughout the economic cycle.
About MFA
Managed Funds Association (MFA), based in Washington, D.C., New York City, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest it, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 fund manager members, including traditional hedge funds, private credit funds, and hybrid funds, that employ a diverse set of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors diversify their investments, manage risk, and generate attractive returns throughout the economic cycle.
