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UK regulator urges tighter private market controls to avoid conflicts of interest - Finance news and analysis from Global Banking & Finance Review
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UK regulator urges tighter private market controls to avoid conflicts of interest

Published by Global Banking & Finance Review

Posted on October 23, 2026

1 min read

· Last updated: October 23, 2026

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UK Regulator Calls for Stronger Private Market Controls to Prevent Conflicts

FCA Urges Improved Conflict Management in Expanding Private Markets

Watchdog's Call to Action

Oct 23 (Reuters) - Britain's financial watchdog on Friday called on private market firms to improve how they identify and manage conflicts of interest as the sector expands and business models grow more complex.

Findings from the FCA Review

Variation in Standards Among Firms

The Financial Conduct Authority (FCA) said a review of private equity, private credit and real estate firms found standards varied widely, with some firms showing strong governance and oversight while others failed to identify conflicts properly or keep controls up to date. 

Expectations for Conflict Management

Key Areas of Focus

The FCA said it expects firms to be able to identify, record, manage and disclose conflicts effectively, and demonstrate that investors are being treated fairly, particularly in areas where investors place significant reliance on firms' judgement, governance and controls. 

Reporting Credits

(Reporting by Nithyashree R B in Bengaluru; Editing by Harikrishnan Nair)

Key Takeaways

  • The FCA’s multi‑firm review found significant variation: while some firms show robust governance and independent valuation practices, others fail to identify or document core conflicts beyond fees and lack controls for valuation in market stress (assets.ctfassets.net).
  • Firms must better capture valuation‑related conflicts—including investor marketing, asset transfers, borrowing, redemptions and remuneration—and ensure functional independence and documented mitigation measures (assets.ctfassets.net).
  • Phase 1 questionnaires and follow‑up deep‑dives (Phase 2) are underway, with firms advised to review and enhance conflict registers, allocation policies, co‑investment procedures and overall governance as scrutiny intensifies (simmons-simmons.com).

References

Frequently Asked Questions

What did the FCA call for regarding private markets?
The FCA urged improved identification and management of conflicts of interest in private market firms.
Which sectors did the FCA review for conflicts of interest?
The FCA reviewed private equity, private credit, and real estate firms.
What issues did the FCA find in private market firms?
Firms showed varied standards; some failed to properly identify or update controls for conflicts of interest.
What does the FCA expect from private market firms?
The FCA expects firms to identify, record, manage, and disclose conflicts, ensuring fair treatment of investors.

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