The FCA published its Regulatory Priorities for Wholesale Buy Side firms on 19 March 2026. The Market Report (MR) is one of nine new publications, which replace the existing 40 portfolio letters, and sets out the regulator’s priorities for the year ahead.
In this article
What does this mean?
The FCA consistently uses each MR to summarise both existing activity and commentary relevant to the sector. In the asset management MR, it also specifically notes that firms with either a retail investment footprint, or pensions activities, must also reference those specific MRs.
The FCA looks ahead to its upcoming work split over four priorities. Some of the content is consistent with existing known issues, but the emphasis on certain topics is useful insight, as are any new areas of focus.
Evolve regulation to foster growth and innovation and serve changing consumer needs
The FCA continues to adapt its approach to support competitiveness and innovation. It highlights upcoming reform of the UK AIFM rules, its work on tokenisation, and streamlining TCFD disclosures. Operationally, it is also working to digitise its own fund authorisation processes and make better use of data. It also encouraging firms to utilise sandboxes to help utilise innovative technologies.
While the FCA wants to transform its data use, it does note that additional data to address gaps, particularly around concentration and leverage may be needed.
For firms, the FCA makes clear that robust governance over emerging technologies, such as AI and distributed ledgers, with clear accountability and risk management processes needed.
Deliver good consumer outcomes
The FCA highlights a range of key issues, including embedding the Consumer Duty with a particular focus on ensuring clear communications. It specifically highlights Model Portfolio Services (MPS) and retirement solutions as needing a consumer lens, and reiterates messaging on the need for oversight of Appointed Representatives (ARs).
It will engage with firms as they implement a range of existing initiatives, such as Targeted Support, CCI disclosures and SDR labelling. It notes it will focus on outlier firms with products/services not aligned with consumers' best interests. It will progress its multi-firm review of MPS, and engage with firms that are developing retail private markets and retirement income products.
Reinforce consistent, high standards across private market investing
Private markets is a consistent theme across multiple priorities. The FCA expects firms to review/update governance and valuation processes, ensuring the effective management of conflicts of interest. As noted, under the consumer outcomes priority, the FCA expects to see retail and retirement products in private markets aligned with the Consumer Duty.
The FCA’s multi-firm review of conflicts of interest in private markets firms is ongoing, but it will also undertake focussed supervisory activity on risk management in private markets.
It is coordinating with other regulators, supporting the BoE in its SWES exercise on private markets, and supporting the FSB and IOSCO’s work on this area too.
Preserve market integrity and resilience to disruption
There is a significant focus on resilience in comparison to previous portfolio letters. It expects firms to strengthen operational resilience and governance frameworks, and highlights the importance of incident response and recovery plans, and dependencies on material third party providers.
This year, the FCA has an extensive range of planned activities linked to this priority. Using data, they will look at risk management in leveraged, illiquid or concentrated investment strategies; they will also finalise policy on liquidity risk management for UCITS and NURS, and consult on AIF liquidity.
Cyber-related risk means the FCA will use its Cyber Resilience Self-Assessment Questionnaire (CQUEST) and run cyber coordination groups.
Other areas
The FCA continues with several other focus areas, including a review of prudential requiremennts, with consultation expected in 2027. Ahead of that, renumeration rules will be considered later in 2026, as will findings from the financial crime survey.
What do firms need to do?
Firms active in private markets or MPS must review their arrangements against the Consumer Duty to ensure alignment, including verifying appropriate data to demonstrate good consumer outcomes with appropriate oversight.
Given the increased prevalence of resilience, firms must proactively consider the implications across their business. The recent material third-party providers publication, and cyber resilience, are key areas where firms need to demonstrate they have enhanced systems to meet current expectations.
The broad commentary on governance and risk management means firms should review arrangements and enhance risk management and governance where appropriate, but with a particular focus on issues highlighted in the MR.
All firms should review the MR against their own business, However, key themes relating to private market exposures, MPS, resilience and consumer outcomes should be of note and form a key part of the assessment.
The FCA also reiterates the importance of governance and risk management across several areas, so firms should ensure this is reflected in their own accountability structures.
“The FCA’s latest Regulatory Priorities signal a more targeted, outcomes-focused approach to supervision, with a clear emphasis on governance, consumer outcomes and the responsible adoption of new technologies. For firms, the priority should be execution - embedding Consumer Duty, strengthening private markets governance and building resilience across operations and third parties. Those that act early will not only ensure alignment with regulatory expectations but can also gain a competitive edge in an increasingly complex and fast-evolving market.”
David Croker
Partner, PwC
Next steps
The remaining MRs are expected by the end of Q1 2026 and will be updated annually.
Contacts
David Croker
Follow us
