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By Simon Currie, William Yonge and Steven Lightstone at global law firm Morgan Lewis & Bockius LLP.

The UK government has been pursuing a pro-growth agenda as one of its core missions, which has resulted in consultations on lighter-touch regimes to encourage investment, and the regulations which govern alternative investment fund managers (AIFMs) are next on its list.

In short, the government has announced proposals on 7 April to update the existing regime for AIFMs, which derives from EU legislation, to reflect a lighter-touch, UK-bespoke regime which is more growth-led and proportionate. This is consistent with the government's aim to promote flexibility and reduce administrative burdens for firms which operate internationally, while retaining crucial consumer and market protections. This will impact venture capital funds, investment companies, real estate funds, private equity, and hedge funds in the United Kingdom.

Overview of the Amendments

Substantive amendments have been suggested to enable the Financial Conduct Authority (FCA) to determine proportionate rules for AIFMs of various sizes, investment activities, risks and specific investor bases, and remove the "cliff-edge" risks which the current regime creates for above-threshold firms.

Noting these shortcomings, the consultation is accompanied by a Call for Input published simultaneously by the FCA, which has proposed amendments to align with the government's revisio......................

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