Deregulation is gaining ground: On both sides of the Atlantic, regulators are shifting focus toward burden reduction — but concerns about increasing risks are also prominent.

Systemic risk concerns are real but manageable: Legitimate questions about hidden credit problems, bank-fund linkages and the widening distribution of private markets products deserve scrutiny — but the risks are being actively monitored, and sophisticated investors are still backing the asset class with conviction.

Engage now, but with eyes open: The industry has a rare opportunity to shape a more proportionate regulatory framework in both the EU and UK — but caution is required: history suggests that what enters the legislative process as simplification does not always emerge that way.

Links:

https://www.traverssmith.com/knowledge/knowledge-container/aifmd-ii-the-next-phase-of-eu-alternative-investment-fund-regulation/

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

https://www.efama.org/newsroom/news/ris-reality-check-why-we-must-hit-pause-retail-investment-strategy

https://www.traverssmith.com/knowledge/knowledge-container/eu-market-integration-package/

https://www.traverssmith.com/knowledge/knowledge-container/buy-side-story-the-fcas-2026-regulatory-priorities-for-the-sector/

https://www.traverssmith.com/knowledge/knowledge-container/fca-private-market-valuation-review/

https://www.sec.gov/newsroom/press-releases/2026-40-sec-cftc-jointly-propose-amendments-reduce-private-fund-reporting-burdens

https://www.theguardian.com/business/2025/oct/14/jp-morgan-jamie-dimon-losses-private-credit-sector

https://www.ft.com/content/5c9939bf-3c85-43b0-b605-842f24cd8753

https://www.bankofengland.co.uk/news/2025/december/boe-launches-system-wide-exploratory-scenario-exercise-focused-on-private-markets

https://www.fca.org.uk/publication/regulatory-priorities/wholesale-buy-side-report.pdf