FCA sets out evolving regulatory focus for private markets
03 July 2025 UK
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The UK Financial Conduct Authority (FCA) has outlined areas of ongoing and future focus for private markets supervision, including valuations, conflicts of interest and leverage, while reiterating its broader shift towards outcomes-focused regulation.
Speaking at the Investment Association’s Private Markets Summit on 2 July, FCA Deputy Chief Executive Sarah Pritchard said the authority had completed a review of valuation practices across private equity, private debt, venture capital and infrastructure. The FCA observed encouraging practices in areas such as consistent methodologies, third-party validation and investor reporting, while also identifying scope for improvement in governance arrangements, management of conflicts, and protocols for handling ad hoc valuations.
The findings are contributing to international workstreams, including a review of valuation principles led by the International Organization of Securities Commissions and broader financial stability initiatives at the Bank of England.
Pritchard also said the FCA would next examine how firms managing private assets handle conflicts of interest. This work sits alongside the FCA’s ongoing engagement with proposed changes to the UK’s alternative investment fund managers regime. The regulator is exploring options to retain and adapt the current framework, with a view to supporting growth and improving proportionality — particularly for smaller and mid-sized firms.
On leverage, Pritchard highlighted the FCA’s role in co-chairing the Financial Stability Board’s (FSB’s) working group on leverage in non-bank financial intermediation. The FSB is due to publish its final recommendations later this month. She noted that while leverage can support growth, excessive or poorly managed exposure may create vulnerabilities — particularly where markets are opaque or exposures are concentrated.
Pritchard underscored the importance of timely, consistent data for both firms and regulators, saying the FCA is reviewing its own data collection processes and plans to consult this summer on retiring some legacy returns. She encouraged firms to invest in the infrastructure needed to support effective regulatory reporting.
The speech also touched on the FCA’s broader regulatory approach. Pritchard reiterated the authority’s interest in supporting safe innovation and outcomes-focused oversight, noting that tools such as regulatory sandboxes, early engagement programmes and the new AI Live Testing function are designed to support experimentation while maintaining appropriate safeguards.
On retail access to private markets, Pritchard emphasised the need for a balanced approach. She said the FCA remains open to exploring expanded access where appropriate protections are in place, pointing to the rollout of long-term asset funds as an example of how this can be managed responsibly.
“We are not standing on the sidelines,” Pritchard said. “We are shining a light in the areas that matter — making sure both the risks and the opportunities are visible to regulators, firms and investors.”
Speaking at the Investment Association’s Private Markets Summit on 2 July, FCA Deputy Chief Executive Sarah Pritchard said the authority had completed a review of valuation practices across private equity, private debt, venture capital and infrastructure. The FCA observed encouraging practices in areas such as consistent methodologies, third-party validation and investor reporting, while also identifying scope for improvement in governance arrangements, management of conflicts, and protocols for handling ad hoc valuations.
The findings are contributing to international workstreams, including a review of valuation principles led by the International Organization of Securities Commissions and broader financial stability initiatives at the Bank of England.
Pritchard also said the FCA would next examine how firms managing private assets handle conflicts of interest. This work sits alongside the FCA’s ongoing engagement with proposed changes to the UK’s alternative investment fund managers regime. The regulator is exploring options to retain and adapt the current framework, with a view to supporting growth and improving proportionality — particularly for smaller and mid-sized firms.
On leverage, Pritchard highlighted the FCA’s role in co-chairing the Financial Stability Board’s (FSB’s) working group on leverage in non-bank financial intermediation. The FSB is due to publish its final recommendations later this month. She noted that while leverage can support growth, excessive or poorly managed exposure may create vulnerabilities — particularly where markets are opaque or exposures are concentrated.
Pritchard underscored the importance of timely, consistent data for both firms and regulators, saying the FCA is reviewing its own data collection processes and plans to consult this summer on retiring some legacy returns. She encouraged firms to invest in the infrastructure needed to support effective regulatory reporting.
The speech also touched on the FCA’s broader regulatory approach. Pritchard reiterated the authority’s interest in supporting safe innovation and outcomes-focused oversight, noting that tools such as regulatory sandboxes, early engagement programmes and the new AI Live Testing function are designed to support experimentation while maintaining appropriate safeguards.
On retail access to private markets, Pritchard emphasised the need for a balanced approach. She said the FCA remains open to exploring expanded access where appropriate protections are in place, pointing to the rollout of long-term asset funds as an example of how this can be managed responsibly.
“We are not standing on the sidelines,” Pritchard said. “We are shining a light in the areas that matter — making sure both the risks and the opportunities are visible to regulators, firms and investors.”
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