FCA CP 26/27: Remuneration: Solo-regulated firms’ rules reform

On 14​ July 2026, the FCA published for consultation CP26/27: "​Remuneration: Solo-regulated firms’ rules reform", with proposals to reform the remuneration framework for solo-regulated firms: AIFMs, UCITS management companies and MIFIDPRU investment firms.

The proposals will ultimately replace the current IFPR, AIFM and UCITS codes with a single, consolidated new code for in-scope solo-regulated firms. The regulations currently governing AIFM would be repealed. 

What’s changing?

The FCA is removing the prescriptive rules. There will be greater flexibility in deferral, malus and clawback, and no requirement to set variable: fixed pay ratio(s). Instead, the responsibility will be on firms to have strong governance and effective oversight of their remuneration arrangements. This may result in firms adopting different structures, but the FCA believes that this will be more effective as it will result in policies that reflect firms' specific business models and risk profiles

The proposed framework seeks to promote these core outcomes:

• Good conduct, healthy culture and effective governance;
• Alig​​​ning​ remuneration with client, fund and investor interests; and
• Reflecting individual risks created by the firm and its staff​

​​The FCA expects that firms that are​ compliant with the existing UK codes, or equivalent EU codes, should generally expect to remain compliant under the proposed new code ​.

Part of a wider reform package

This CP comes alongside FCA consultations in the following areas:

• CP26/26: Fund Reporting for Asset Management Entities (FRAME) see our blog post here ​
• CP26/28: The UK AIFM Regime and draft HMT legislation Alternative Investment Fund Managers Regulation – Draft SI and Policy note - GOV.UK​​ see our blog post here

Timin​g

The consultation closes on 16 September 2026. The FCA expect to publish the final rules in Q1 2027. For AIFMs, given the wider AIFM reforms currently being undertaken, the new remuneration rules will apply initially to full scope UK AIFMs (since smaller AIFMs will be excluded entirely), and to medium and large UK AIFMs once the AIFM reforms take effect.