Conflicts of interest and fair customer treatment in private markets

Key dates

2026-10-23

The FCA published the multi-firm review findings and associated supervisory expectations.

Suggested considerations

• Firms should consider performing a documented gap assessment against the review findings, including whether their conflict framework reflects the substance of UK activities rather than only formal delegation or legal arrangements.
• Compliance teams may wish to refresh business-model and transaction-level conflict inventories to cover multiple funds, vintages, continuation and evergreen vehicles, affiliated businesses, shared services, capital-structure conflicts, remuneration, valuation, financing, redemptions, asset transfers and exit decisions.
• Firms should consider testing whether conflict identification occurs repeatedly from origination through valuation, allocation, monitoring, restructuring and exit, rather than only at onboarding or transaction approval.
• Firms may wish to define and evidence materiality thresholds, escalation triggers, accountable decision-makers and governance forums for complex or material conflicts, including when engagement with LPs or LP advisory committees is appropriate.
• For cross-fund transfers and continuation transactions, firms should consider independent challenge, valuation oversight, analysis of competing investor interests, documented alternatives and evidence supporting the fairness of the outcome; investor consent or disclosure alone may not demonstrate adequate management.
• Firms should consider reviewing gifts and entertainment controls beyond monetary thresholds, including purpose, recipient, frequency, patterns, inducement risk, approvals, record keeping and compliance monitoring.
• Firms may wish to assess whether information barriers use physical, organisational and system controls, with monitoring and oversight of information sharing, rather than relying primarily on staff judgement and training.
• Senior management and control functions should consider whether second-line compliance has sufficient independence and authority, and whether periodic internal-audit or other third-line reviews provide effective assurance and challenge.

What changed

This is supervisory guidance and a statement of FCA expectations, not a new rule or formal implementation deadline. The FCA expects firms to identify, assess, record, manage, mitigate and disclose actual, potential and perceived conflicts across the full investment lifecycle, based on the substance, scale and complexity of their UK activities rather than their formal legal structure. Firms are expected to maintain responsive conflict inventories, clear materiality thresholds, accountable owners, escalation routes, effective second-line compliance oversight, independent challenge and periodic third-line assurance. The FCA specifically highlights enhanced governance and valuation oversight for cross-fund transfers and continuation transactions, active monitoring and records for gifts and ent

Who is affected

• UK asset managers managing private equity, private credit or real estate funds
• UK AIFMs and managers of alternative investment funds investing in private-market assets
• UK investment advisers and portfolio managers involved in private-market transactions
• Private-market firms operating within banking, insurance or other wider financial groups, including firms where formal investment decisions are taken by overseas entities

Related regulations

• FCA SYSC 10
• FCA COLL 8.5.7R
• FCA COBS 2.3A.8R
• FCA COBS 11.7
• FCA COBS 11.7A
• FCA Principles for Businesses Principle 8
• AIFMD
• Consumer Duty