UK Plans Regulatory Easing for Smaller Hedge Funds, PE Firms

The UK government is proposing significant regulatory changes for hedge funds and private equity firms, aiming to raise the threshold for full-scope regulation from £100 million to £5 billion in assets under management. This shift is designed to reduce compliance burdens on smaller firms, enhance the UK's appeal as a leading investment hub, and stimulate market activity amidst sluggish economic growth. The Financial Conduct Authority and HM Treasury launched a consultation to gather industry feedback on these proposals. Officials believe that easing regulations will allow smaller funds to operate more efficiently, potentially increasing returns and fostering innovation within the sector. The move comes as the UK seeks to bolster its competitive edge post-Brexit, responding to slower growth compared to other European markets. The FCA has requested comments on the proposed changes by June 9, emphasizing the need for rules tailored to the needs of UK investment managers.