This Practice Note explores key elements of the UK regime for alternative investment funds (AIFs) and their managers, derived from the Alternative Investment Fund Managers Directive (AIFMD) (Directive 2011/61/EU). For information about the EU AIFMD regime, see Practice Note: EU AIFMD—essentials. UK AIFM regime and reform proposals 11 pm (GMT) on 31 December 2020 (IP completion day) marked the end of the Brexit transition period following the UK’s withdrawal from the EU. AIFMD had already been implemented in the UK through various UK legislation, regulations and Financial Conduct Authority (FCA) rules and guidance, (see: Sources of the UK AIFM regime) and those measures continue to underpin the UK framework. The UK alternative investment fund managers (AIFM) regime remains closely aligned with AIFMD, as originally implemented. The main differences since IP completion day have been technical assimilation amendments to ensure the regime operates as a standalone UK framework and the loss of passporting. By contrast, EU Member States were required to transpose Directive (EU) 2024/927 (AIFMD II) into national law by 16 April 2026, marking a

This timeline shows key developments relating to UK regulation of central securities depositories, including under Assimilated Regulation (EU) 909/2014 (the UK Central Securities Depositories Regulation), from 2024 onwards. For earlier developments, see Central Securities Depositories Regulation (CSDR)—timeline [Archived]. 2026 Date Source Document Description 13 August 2026 FCA T+1 Settlement: are firms ready for 2027 The FCA has published a blog by Jamie Bell, Head of Capital Markets, assessing market participant readiness for the UK's transition to a T+1 securities settlement cycle on 11 October 2027. The FCA found most participants have met expectations but some remain considerably behind. Buy-side readiness is flagged as a concern, consistent with the Value Exchange's Q1 2026 survey. Third-party providers are directed to share T+1 plans with clients immediately. The FCA states it will adopt an increasingly intrusive supervisory approach as the deadline approaches and may take action against inadequately prepared participants.See: FCA blog assess T+1 settlement readiness ahead of October 2027 transition. 8 July 2026 PRA PS17/26—Regulated fees and levies: Rates proposals 2026/27The Bank

ARCHIVED: This Practice Note has been archived and is no longer maintained. STOP PRESS: The Short Selling Regulations 2025 were made and published on 13 January 2025, along with an explanatory memorandum. The regulations replace the assimilated UK Short Selling Regulation and establish a new legislative framework for the regulation of short selling in the UK, creating designated activities for short selling and giving the Financial Conduct Authority (FCA) rulemaking powers related to those activities, and powers to intervene in exceptional circumstances. Certain provisions came into force on 14 January 2025, with the remaining provisions coming into force on the day on which the revocation of the UK Short Selling Regulation comes into force under FSMA 2023. The new UK regime removes the requirements placed on investors when taking out short positions in sovereign debt or sovereign credit default swaps (CDS) and the related reporting requirements, and retains sovereign debt and sovereign CDS in scope of the FCA’s emergency intervention powers on short selling. For a summary

What is a credit rating agency methodology? A credit rating agency (CRA) methodology is the body of practices, procedures and rules applied by a CRA when issuing or revising a credit rating. CRAs issue three main types of ratings: • ratings of corporates • ratings of sovereigns, and • ratings of securities issued in a securitisation or similar transaction (structured securities) in which a special purpose vehicle (SPV) holds a pool of underlying assets, and payments to holders of the structured securities are dependent on payments (cash flows) generated by the underlying assets A credit rating of a corporate or sovereign is typically based on an analysis of: • the creditworthiness of the entity being rated before external support • any external support that might be available to the entity being rated if it finds itself in financial difficulties, and • the specific financial instruments that are being rated A credit rating of structured securities is typically based on an analysis of: • the credit quality of the underlying assets • legal and

This Practice Note focuses on the approach of UK authorities and regulators to the regulation of cryptoassets. It also provides some background to the meaning of cryptoassets and the unique challenges that cryptoassets pose to regulators. For information about the approach taken by supranational bodies and EU authorities and regulators, see Practice Notes: EU regulation of cryptoassets and Supranational approach to the regulation of cryptoassets. This Practice Note should also be read in conjunction with Practice Note: Web 3.0, digital assets and cryptoassets-essentials which discusses: • What are cryptoassets? • Common terms associated with cryptoassets • Development of cryptoassets • Characteristics of cryptoassets • Considerations for businesses looking at cryptoasset technology • Cryptoassets, the smart contract and ICOs • Disputes involving cryptoassets • Regulation of cryptoassets • Cryptoassets as regulated investments This Practice Note should also be read in conjunction with Practice Note: The UK regulation of digital assets from a payments and e-money perspective, which discusses whether particular digital assets are subject to the Electronic Money Regulations 2011, SI 2011/99 (EMRs 2011) and/or the

Scope of this Practice Note This Practice Note considers how the UK authorities implemented the second Electronic Money Directive (Directive 2009/110/EC) (2EMD) through secondary legislation, principally the Electronic Money Regulations 2011, SI 2011/99 (EMRs 2011), as well as changes to the rules and guidance published by the Financial Services Authority (FSA) (predecessor to the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA)). This Practice Note provides also an overview, and highlights the key provisions of the EMRs 2011 and looks at the changes made to the EMRs 2011 by the Payment Services Regulations 2017 (PSRs 2017) made as a result of amendments to the 2EMD by the recast Payment Services Directive (Directive 2015/2366/EU) (PSD2). It also discusses the impact of the UK’s decision to leave the EU has had on the UK’s e-money regulatory requirements. Background to the second Electronic Money Directive The first Electronic Money Directive (Directive 2000/46/EC) (EMD) was implemented in the UK in April 2002 in a piecemeal way, primarily by the implementation of the Electronic Money (Miscellaneous

This Practice Note describes the UK regulation of exchange traded funds (ETFs), which are broadly open-ended investment funds that track for example an index, asset class or strategy and are traded on an exchange or other trading venue. It also sets out developments and financial stability issues in the ETF market. What is an ETF? An ETF is defined as ‘a fund of which at least one unit or share class is traded throughout the day on at least one trading venue and with at least one market maker which takes action to ensure that the price of its units or shares on the trading venue does not vary significantly from its net asset value and, where applicable, from its indicative net asset value’. This definition of ‘ETF’ is set out in the Financial Conduct Authority (FCA) Handbook Glossary and is derived from Article 4(1)(46) of Directive 2014/65/EU (MiFID II). ETFs are the most popular form of exchange traded products (ETPs) in the UK. Other ETPs include exchange traded commodities (ETCs) and exchange traded

Scope of this Practice Note This Practice Note examines strategies implemented by the UK government and financial regulators (in particular, the Financial Conduct Authority (FCA), the Bank of England (BoE) (including the Prudential Regulation authority (PRA) and the Payment Systems Regulator (PSR)) to encourage innovation in the UK financial technology (fintech) market in a well regulated manner. It provides an overview of the most prevalent financial innovations; the current status of the fintech industry and successes so far; the future prospects for, and the associated risks in financial innovation; and the regulatory approach to encourage the development of, and investment in the fintech industry. Finally, it looks at the role that financial regulators play with regard to the rising use of artificial intelligence (AI). Fintech encompasses a wide range of financial services and products that intersect with technology. These include crowdfunding platforms such as peer-to-peer lending, online payments and credit services, digital wallets and e-money, automated or robo investment advice, AI, big data analytics, blockchain and cryptoassets. While these products and services are

This Practice Note describes the UK regulatory regime for insurance-linked securities (ILS). It explains what ILS are and covers the requirements under: (1) the Prudential Regulation Authority (PRA) Rulebook for Insurance Special Purpose Vehicles (ISPVs); (2) Section 284 of the Financial Services and Markets Act 2000 (FSMA 2000); (3) the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 (RAO); (4) the Risk Transformation Regulations 2017, SI 2017/1212 (RTRs); and (5) the Risk Transformation (Tax) Regulations 2017, SI 2017/1271 (RTRs Tax). What are insurance-linked securities? ILS are a form of risk management for insurance and reinsurance firms. Insurers routinely manage their exposure to risk by entering into an arrangement in which: • the insurer retains its direct liability to its policy holders, but • another firm ◦ receives amounts corresponding to part of the premium paid by policy holders to the insurer, and ◦ is liable to pay amounts to the insurer which correspond to an agreed proportion of losses incurred by the insurer This is also referred

What are mobile payments? Mobile payments, as an industry, is rapidly expanding in the UK with the launch of Apple Pay, Google's 'Android Pay' and Samsung's 'Samsung Pay'. The retail payments market has experienced significant technical innovation, with rapid growth in the number of electronic and mobile payments and the emergence of new types of payment services in the market place, which challenges the current framework. This competition means there are several different models for making a mobile payment. The most prominent models for mobile payments are based on three different technologies: • contactless payments—these are payments using Near Field Communications technology (NFC) that allows smartphones and other enabled devices to communicate using the NFC tag built into the device. This is, for example, what is used in Apple Pay • mobile payment application—this is where a payment 'app' is downloaded onto a customer's device to make a payment. Examples include ApplePay and SamsungPay. Mobile payment apps are also popular and some phones have a mobile payment feature built into the device; and • payments

STOP PRESS: In March 2025, the government announced its intention to consolidate the Payment Systems Regulator (PSR) and its functions primarily into the Financial Conduct Authority. The move is intended to streamline the regulatory environment, reduce overlap, and allow businesses to focus on innovation and service delivery. HM Treasury consulted on the regulatory approach to achieving this consolidation on 8 September 2025. The government proposes to move the functions of the PSR into the Financial Services and Markets Act 2000. No new categories of persons will be brought in scope of payment systems regulation and the FCA's conduct and prudential regulatory remit in relation to payment services providers will not be changed. The relevant statutory amendments to achieve the merger of the PSR and the FCA were included in the Financial Services and Markets Bill 2026 introduced in Parliament on 19 May 2026. In the interim, the PSR and FCA plan to collaborate closely. Forthcoming Change: The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026,

The Bank of England (BoE) has published a statement on consultation paper CP18/23 regarding diversity and inclusion in PRA-regulated firms. In 2023, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) consulted on proposed rules to improve diversity and inclusion in regulated firms. Due to broad feedback, expected legislative developments, and to avoid additional burdens on firms, the FCA and PRA decided not to proceed with these proposals. A letter from the deputy governor and CEO of the PRA, Sam Woods, to the chair of the Treasury Committee, Dame Meg Hillier MP, provided an update on this decision. The letter emphasised the importance of diversity and inclusion for improved governance, decision-making, and risk management, and acknowledged the Committee's reservations about the reporting aspects of the proposals.