In this week's issue of Travers Smith's Alternative Insights, we are looking at UK regulator's client categorisation rules and their effect on firms looking to access individual investors.

Wealthy individuals targeted: In Europe, policymakers and larger private fund managers are adapting rules and processes to attract more high-net-worth investors, while acknowledging that managing investor protection rules is essential.

FCA aims to simplify categorisation: The UK's regulator is proposing a more flexible, judgment-based approach to opting up retail clients, replacing rigid thresholds but stressing the need for robust assessments and proper due diligence.

Firms must maintain standards: As individual investors become more prevalent in private markets, compliance processes are essential – requiring significant investment but promising lasting value.

Links:

https://www.traverssmith.com/knowledge/knowledge-container/eu-retail-investment-directive-and-regulation/

https://url.uk.m.mimecastprotect.com/s/LnL0CQY4irXQXQFGHLIGkFHp?domain=sites-traverssmith.vuturevx.com

https://www.ukprivatecapital.co.uk/static/dd01a037-6196-4184-87b43369579f1f87/260119-UK-Private-Capital-reponse-to-CP2536-Client-Cat-and-CoI-FINAL.pdf