On 19 March 2026, the FCA published both the Wholesale Buy Side and Wholesales Markets reports, forming part of the nine annual reports intended to replace the FCA’s prior portfolio letter approach for Board and CEOs. The roadmap outlined by the Wholesale Buy Side report (the “Report”) consolidates the FCA’s forward-looking supervisory and policy priorities. It is therefore a key resource for asset managers, within the wholesale asset management ecosystem, helping firms understand where the FCA expects them to engage.

Scope of the Report:

The Report is structured around four core priority areas, defining both the FCA’s thematic scope of supervisory activity and key framework areas which firms should address, namely:

• Supporting confident investing in private markets, reflecting the continued growth and increasing systemic importance of private assets within the UK market. This is inclusive of discussion on valuation methodologies, conflicts of interest management and identification, governance arrangements, and product design.

• Delivering good consumer outcomes, with a focus on wholesale buy-side firm’s nexus to retail outcomes via distribution chains, model portfolio services (“MPS”), and product manufacturing, all feeding into the application of the Consumer Duty.

• Facilitating innovation and growth through proportionate regulation, which encompasses ongoing and forthcoming policy initiatives, modernisation of regulatory data collection, and engagement with technological developments such as fund tokenisation, distributed ledger technology and AI.

• Ensuring market integrity and resilience, a cross-cutting priority for all wholesale buy-side firms, which outlines expectations in relation to operational resilience, third-party risk management, leverage and concentration risk, and systems and controls to prevent market abuse.

Taken together, these four priority areas of the Report define a broad but coherent supervisory perimeter, setting out an integrated view of the FCA’s expectations across conduct, prudential, operational, and strategic dimensions.

Private Markets Standards:

A key FCA priority is to “reinforce consistent, high standards across private market investing”, which focusses on valuation governance and transparency, conflicts identification / management, and product development aligned with Consumer Duty expectations where relevant. Specifically, the FCA notes prior focus on private asset valuation and current work on conflicts in business models, including seeking alignment with investors’ interests and consistency across market practice.

The Report highlights growth in models blending public / private assets, or offering periodic redemptions against predominantly illiquid assets, explicitly warning against product structuring that prioritises distribution over asset characteristics – pointing to appropriateness concerns for investors unwilling to accept illiquidity. The FCA’s clearest soundbite is its warning that firms must not design or structure products to prioritise ease of distribution over underlying asset characteristics, and that where investors cannot accept private-asset illiquidity, these assets are correspondingly “unlikely to be appropriate for them.”

The FCA states that it will continue engagement on valuation / conflicts / risk management and will: (i) progress an ongoing multi-firm review on conflicts in private markets; (ii) communicate good practice to the market; (iii) undertake focused supervisory work on private markets risk management, and (iv) support the Bank of England’s new private markets system-wide exploratory scenario (“SWES”).

Significantly, the FCA’s focus on valuation governance and evidence of robustness is being utilised as a clear supervisory lever – signalling that the FCA is moving from promoting good practice on private asset valuation to actively assessing standards and consistency, ultimately tied to investor trust. Managers should therefore be alive to the fact that valuation committee governance / independence, escalation, and documentation, along with third-party valuer oversight and challenge are likely to be tested in future supervisory engagement.

Consumer Outcomes in Instances of Retail Exposure:

Although this is a “wholesale buy-side” report, the FCA’s second priority is to deliver good outcomes to consumers, including progressing a multi-firm review of model portfolio solutions (“MPS”) and focusing on “outlier firms” that design products not in consumers’ best interests.

Concrete expectations for firms include embedding Consumer Duty for retail business using an outcomes-based approach; applying a consumer lens to products and services (explicitly referencing MPS and retirement solutions); providing clear communications to enable informed investment decisions, and maintaining strong oversight of appointed representatives where relevant.

Firms therefore considering LTAFs, hybrid funds, or other semi-liquid structures, either directly or via feeder arrangements, should be aware that the FCA is clearly anchoring its scrutiny in product governance, liquidity risk management and stress testing, and redemption terms and gating / suspension toolkits, all through the retail lens.

Moreover, the FCA also indicates it plans to clarify the Duty’s application to reduce disproportionate burdens on wholesale firms, with a consultation across the distribution chain and to wholesale firms expected mid-year.

Resilience and Market Integrity:

A further FCA priority is to preserve market integrity and “resilience to disruption”. Significantly, the FCA’s expectations for firms include strengthening operational resilience (for instance by embedding in product design / change management), maintaining robust incident response / recovery, managing dependencies on third parties through due diligence and monitoring, strengthening governance around leverage/concentration and newer technologies (including AI), and acting as good market participants with strong systems/controls to detect and prevent market abuse.

The FCA also notes it has engaged firms regarding leveraged / illiquid / concentrated strategies and expects firms to assess concentration risks, including those arising from counterparties, and to stress test resilience to crowded markets. As a result, firms should anticipate questions around leverage measurement, concentration management, liquidity risk, and stress testing for such “crowded market” scenarios.

Innovation and Growth:

As part of the FCA’s priority to evolve UK regulation to foster growth, innovation, and changing consumer needs, the FCA will be releasing a consultation on a new regulatory regime for AIFMs; it will be interesting to see how this differs from the existing regime considering these priorities. In addition, the FCA is expecting to transform the regulatory data collection for asset managers and funds to remove unnecessary reporting.

Next steps:

Whilst most of the context is not surprising given its work in private markets over the last couple of years, the Report provides a helpful consolidated overview of the FCA’s upcoming priorities. Firms should utilise it as a tool when assessing their existing frameworks and when launching new products. This approach will ensure that firms are on the front-foot of any regulatory developments in the year ahead and are considering the FCA’s priorities holistically, which will no doubt be viewed positively by the regulator.