FCA simplifies AoV reporting requirements but maintains rigorous standards

The FCA has now finalised its revised assessment of value reporting requirements, maintaining standards generally, whilst simplifying the reporting requirements themselves. These rules were previously consulted on back in June 2025 (CP25/16), and the FCA is proceeding with its rule amendments largely as consulted on. 

The detail:

The key change is the paring back of "detailed reporting requirements" in favour of a general requirement for authorised fund managers to include in the annual report a summary of the AoV and the conclusion of the assessment as to whether the charges out of scheme property are justified in the context of the overall value delivered by the scheme (alongside details of any remedial action in the face of poor value). To this end, the FCA has removed many of the detailed reporting requirements in COLL 4.5.7R(8), COLL 8.3.5AR(5) and COLL 15.5.3R(5). The general requirement prescribes that the information in the annual report should include at least the AFM’s conclusion as to whether charges out of scheme property are justified in the context of the overall value delivered by the scheme and should also summarise any remedial action they have or will take in the face of poor value. 

The rules are clear that these are minimum requirements – and therefore it will be for AFMs to decide how much detail to include. Whilst this achieves a degree of flexibility for AFMs, it also potentially introduces a degree of uncertainty – and fund managers will need to consider what is appropriate for each fund. 

The FCA has nevertheless made clear that rigorous standards continue to apply as regards the value assessments themselves (and there are no revisions to the AoV process, with the procedural/governance rules in COLL 6.6.20R, COLL 8.5.17AR and COLL 15.7.17R that relate to the value assessment process itself being retained). This aligns with the view that these rules (introduced in 2019) are largely seen as a governance remedy as opposed to a disclosure remedy – and are serving their purpose in terms of driving better value within funds – with the changes simply designed to help reduce compliance burdens

The FCA has also retained the rules which allow AFMs to present the conclusions of two or more individual assessments in a composite report rather than within each fund’s annual long report.

Timing

The handbook changes came into force on 3 October 2025

Resources:

FCA handbook Notice 133 can be found here

The statutory instrument making the handbook changes can be found here