AIMA is pleased to have secured significant regulatory changes that benefit our members and the wider investment industry in the UK, the most important of which are listed below:

Short Selling Disclosures – Rebundling Research Payments - Securitisation

1) Short Selling

HM Treasury has published the Government response to the Short Selling Review which has been a prominent item on AIMA’s advocacy agenda in 2023. We’ve achieved excellent results for industry here:

• The government will replace the current public disclosure regime based on individual net short positions with an aggregated net short position disclosure regime.
• The government will increase the current threshold for net short position reporting to the FCA from 0.1% to 0.2%.

A parallel consultation will also now open the possibility of scaling back short selling rules so that they no long apply to sovereign debt and CDS.

2) Research Payments

The independent Investment Research Review commissioned by HM Treasury has been published.

• It suggests that asset managers should be allowed to pay for research on a bundled basis; this is very welcome given our significant efforts in recent months to encourage authorities on both sides of the Atlantic to come up with a workable solution to the clash of their respective rules on research payment.

• The FCA has already responded to the Investment Research Review to say that it is “open to consider swift actions, if needed, to support firms impacted by changes to regulation in other jurisdictions, based on discussion with individual firms or parts of the market”.

AIMA is in touch with the FCA to progress this work.

3) Securitisation

The UK has confirmed it will press ahead with changes to the securitisation framework which includes many positive developments:

• The UK will narrow the scope of the institutional investor definition to exclude non-UK AIFMs, removing an important area of uncertainty for non-UK AIFMs seeking UK investors.

• The FCA will also be empowered to tailor new rules for due diligence, retention, reporting and many other key requirements to improve the ability of UK managers and their clients to invest in global securitisation products.

We have been working with the FCA to highlight the professional nature of the hedge fund industry and where more flexible treatment of securitisation would be beneficial. These announcements are a strong indication that further significant reforms are being considered.