The FCA’s Wholesale Buy Side Regulatory Priorities 2026 report is part of its new annual sector-reporting model, replacing the old portfolio-letter approach. It is addressed not only to asset managers, but also to custody and fund services providers. The FCA also says firms should consider its related pensions and consumer investments priorities reports where relevant.
The report is not a package of immediate rule changes. Rather, it is a concise statement of the FCA’s current supervisory and policy priorities, and a guide to the areas where boards, senior management and legal and compliance teams should expect regulatory focus over the coming 18 months.
A separate report sets out the FCA’s specific additional priorities for wholesale markets (you can read our client note on that report here).
Priority 1: growth, innovation and changing client needs
The FCA’s first priority is to evolve regulation to support growth and innovation. In this area, the report points to work on a more proportionate regime for AIFMs, reform of the asset management data model, digitisation of the fund authorisation process, and further policy work on fund tokenisation and DLT-enabled structures.
The practical takeaway is that the FCA remains open to innovation, but will expect firms using AI, DLT or tokenised structures to be able to demonstrate appropriate governance, oversight and risk management. Firms developing new products or operating models should therefore expect regulatory scrutiny to focus less on the technology itself and more on the quality of the controls around it.
Priority 2: consumer outcomes
Although this is a wholesale buy-side report, the FCA makes clear that consumer outcomes remain an important priority where firms have retail exposure. It highlights ongoing work on model portfolio services, SDR and labelling, and clearer investor communications. It also refers to wider retail-related initiatives, including targeted support, Consumer Composite Investments, and work relating to retail private markets and retirement income solutions.
Importantly, the FCA says it expects to consult this year on clarifying how the Consumer Duty applies across the distribution chain and to wholesale firms, with a view to reducing disproportionate burdens on wholesale activity. For wholesale-only firms, it would likely be best to monitor the consultation closely before making structural changes.
This priority is also relevant beyond traditional retail-facing managers. The report refers to Appointed Representatives oversight and to supervisory work with depositaries on how effectively they perform their independent oversight role.
Priority 3: standards in private markets
Private markets remain a major area of focus. The FCA continues to emphasise valuation governance, conflicts of interest, and product design in private market strategies, particularly where investors rely heavily on manager judgement. Its ongoing work on conflicts in private markets will be especially relevant to firms active in private credit, infrastructure, real estate and other less liquid strategies.
The report also sends a clear message on products that seek to broaden access to private markets. The FCA is concerned about structures that combine illiquid assets with redemption features or otherwise prioritise ease of distribution over the characteristics of the underlying assets. Firms should therefore be reviewing valuation processes, conflicts frameworks, liquidity terms and product governance, especially where products are being designed for a wider investor base.
Priority 4: resilience and market integrity
The fourth priority covers both operational resilience and market integrity. The FCA highlights cyber resilience, third-party dependency, leverage and concentration risk, and firms’ systems and controls to detect and prevent market abuse. It notes supervisory work on operational resilience self-assessments, identifies weaknesses in firms’ cyber arrangements, and points to further work on liquidity risk management, AIF liquidity, transaction reporting, insider risk management and resilience testing tools such as CBEST, STAR-FS, CQUEST and ORQUEST.
The practical message is that firms should be able to evidence robust controls around critical third parties, cyber governance, incident response, stress testing, surveillance and transaction reporting.
Other areas to watch
The report also flags a number of cross-cutting workstreams, including AIFM prudential reform, a post-implementation review of IFPR, the SM&CR review, the future regime for ESG ratings providers, further cryptoasset policy work, and findings from the FCA’s financial crime survey. It also notes that proprietary ESG ratings provided only as part of an existing regulated activity are not expected to fall within scope of the ESG ratings regime.
The timeline attached to the report begins in Q2 2026, not only in the second half of the year, and points to a series of consultations, policy statements and supervisory outputs running through 2026 and 2027.
Practical implications
For firms, the report suggests four immediate questions. Are innovation projects supported by appropriate governance and risk controls? Is the scope of Consumer Duty exposure properly mapped? Are private markets valuation and conflicts frameworks sufficiently robust? Are operational resilience, cyber and market abuse controls up to date? And are legal and compliance teams tracking the FCA’s consultation timetable closely enough? Taken together, the report is a useful indicator of where the FCA expects firms to focus now.
