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The UK’s Financial Conduct Authority has proposed a package of reforms that it says will tailor requirements proportionately for asset managers, cut costs for firms and provide better data to supervise the sector more effectively.

The regulator said a that large share of the £128 million ($171 million) per annum savings is expected to come from simpler Fund Reporting for Asset Management Entities (FRAME) requirements. 

The package would also modernise and simplify Alternative Investment Fund Managers Directive (AIFMD)-related rules dating from 2013, the FCA said in a statement.

'By tailoring the regime for UK asset managers, we can collect better data while also saving industry tens of millions of pounds a year. With a sharp focus on proportionality, we can particularly boost freedom for smaller firms to find new ways to achieve the same high standards,” Simon Walls, executive director, markets, at the FCA, said.

The FCA is also consulting the sector about how to simplify remuneration rules for the relevant firms – ones solely regulated by the FCA – by replacing overlapping remuneration codes with a clearer, more proportionate framework.

The regulator said it is inviting feedback before making final decisions.

The Independent Investment Management Initiative, a member-led industry think tank, said it welcomed the FCA’s proposals.

“Our members fully support high regulatory standards, but it is equally important that the regime recognises the differing scale, complexity and risk profiles of client types across the investment management sector,” IIMI said. “Measures that simplify reporting requirements, reduce unnecessary administrative burden and provide firms with greater flexibility should allow management teams to spend more time focused on delivering good outcomes for clients and less on reporting and processes that add limited value.”

Among recent moves, the FCA is conducting an investigation into the use of AI tools by UK retail clients.