The FCA’s review of private market firms found conflicts of interest handled unevenly, with recurring weaknesses in cross-fund transfers and multi-party transactions, gifts and entertainment, and information barriers. I think all three are events that a system can record at the moment they happen, and a firm that cannot produce a timestamped record for each should fix that before it does anything else.
What the FCA reported
The FCA published the review on 23 October 2026. It covered how firms identify, manage, mitigate and disclose conflicts across private equity, private credit and real estate. The regulator found good practice, including strong governance, effective oversight and independent challenge. It also found that some firms were failing to identify conflicts adequately or keep their controls up to date.
Michelle Beck, director of wholesale buy-side at the FCA, said: “Firms need to ensure their management of conflicts of interest keeps pace with growth in their size and complexity.” She added that standards “varied considerably.” The FCA expects firms to be able to identify, record, manage and disclose conflicts, and to show that investors are being treated fairly.
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The release gives no count of firms reviewed and no count of firms that fell short. It names no firm. The useful part is the list of three recurring weak spots.
Each weak spot is an event
A cross-fund transfer happens on a date, between two named funds, at a price someone approved. A multi-party transaction has a list of participants and a sequence of decisions. A gift or an entertainment invitation has a giver, a recipient, a value and a date. An information barrier changes when a person is added to or removed from a restricted list, and that change has a time on it too.
Because each of these is an event with participants, each can carry a conflict entry from the moment it is created. My position is that firms should build the entry into the workflow that creates the event, so the conflict record exists before the transfer executes, before the gift is accepted and before the person crosses the wall. A record reconstructed later from emails shows the regulator what a firm remembers, and a record made at the event shows what the firm did.
In practice I would ask a private markets firm for three things. First, a cross-fund transfer should not execute until a reviewer outside the deal team has recorded the basis on which the price is fair. Second, every change to a restricted list should be logged with the person, the reason and the time. Third, a gifts and entertainment register should have approval thresholds set by the firm, with a monthly review by someone who does not sit on a deal. The software needed is a form, a rule and a log, wired to the place where the event begins.
The strongest objection
The best counter-argument comes from the FCA’s own wording. The regulator said some firms failed to identify conflicts at all. A log cannot record a conflict that nobody recognised, and a firm with a perfect register can still have a bad judgement call sitting inside it.
That is correct as far as it goes, and it is why I put the weight on events rather than on a firm’s list of known conflicts. A rule that says every transfer between two funds the firm manages creates a conflict entry by default does not depend on someone noticing the problem. The entry is raised by the type of event. Judgement then has a place to act: the reviewer decides whether the price is fair, and the record shows who decided and on what basis. Software does not replace that judgement. It makes sure the judgement is asked for and written down.
Why this reaches past the UK
The same supervisory logic is visible elsewhere. The SEC published a new exam handbook for registrants, and the FCA’s thematic work includes recent surveys such as the one in which firms reported closing 238,396 suspected mule accounts in 2025. Examiners in both places ask firms to show evidence, and a firm that holds its evidence as event records can answer faster than one that assembles it on request.
The FCA also noted that, although it was outside this review, it is examining governance and conflicts concerns about private credit being used to fund consumer litigation claims, and it points to significant risks of harm to investors, consumers and markets. Private credit firms should read that as a sign the regulator’s attention on conflicts reaches past these three areas.
What I would do this quarter
A chief compliance officer at a private markets firm can run a simple test on all three areas. Pick one cross-fund transfer, one change to a restricted list and one accepted gift from the last quarter, and time how long it takes to produce the full record for each, including who approved it and on what basis. If any of the three takes more than a day, the firm has found its first project.
