FCA authorises first Long Term Asset Fund

The Financial Conduct Authority (FCA) has authorized the first Long Term Asset Fund (LTAF).

The LTAF is a new category of an open-ended authorized fund designed to invest efficiently in long-term assets. The FCA enabled the innovation by creating a new regulatory regime which came into force in 2021.

Sarah Pritchard, Executive Director of Supervision, Policy and Competition – Markets said:

‘We made these rules to create an environment where investors that wish to invest in productive finance assets can more easily do so.

‘It was for market participants to make this a reality and it is good to see this product innovation now taking place.’

The FCA has worked with the Bank of England, the Treasury, and industry, through the Productive Finance Working Group to create an environment where investment in longer-term, less liquid assets, by investors who understand the risks, can flourish. The ability to invest in illiquid assets, through appropriately designed and managed investment vehicles is important for supporting economic growth and the transition to a low-carbon economy.

The FCA is currently inviting views on ideas about how to further improve asset management regulation with a more modern and tailored regime, to make sure the regime takes account of developments in technology and supports innovation.

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