The FCA’s FRAME reporting framework introduces Essential and Enhanced Reporting requirements. Looking into the proposed templates, it’s clear that Enhanced Reporting is not simply a longer version of the Essential return, but a fundamental shift in the type of information the FCA wants to collect and how it intends to supervise the industry in future.

In our previous insight in our series, we explored the FCA's proposed FRAME reporting framework and the introduction of Essential and Enhanced Reporting requirements. The next question is, what does this mean in practice?

The Essential Reporting regime is designed to provide the FCA with a concise picture of a fund's strategy, investors, performance, liquidity, and key risk characteristics.

Enhanced Reporting is fundamentally different, for funds above the proposed £500 million NAV threshold, the challenge is unlikely to be completing regulatory returns. Instead, it will be ensuring that the underlying data exists, is reliable, and can be produced consistently in a structured format.

Rather than relying on a small number of headline measures, the FCA is seeking a deeper understanding of:

• Investor composition

• Liquidity profiles

• Portfolio composition

• Leverage

• Financing arrangements

• Valuation practices

This highlights the regulator's commitment to collecting data with a clear supervisory purpose, rather than accumulating information without a defined regulatory objective. It’s with these changes that the FCA believes it can get a better understanding of where risks sit within the market and how those risks may develop over time. This will help to identify emerging risks earlier, understand where risks are concentrated, and respond more effectively to maintain market stability.

Investor related information

While the proposed template contains a number of notable changes, one of the most significant developments is the level of detail being sought on investors.

The FCA proposes collecting information not only on investor location but also on client categorisation, including distinctions between retail investors, professional clients, and elective professional clients. The inclusion of Open Protocol Enabling Risk Aggregation (OPERA)-based investor classifications is particularly notable and reflects a desire for greater consistency across the industry.

This is not simply a data-gathering exercise. It aligns with the FCA's wider focus on consumer protection, distribution practices, and investor outcomes. Firms should therefore expect attention not only on the reported data itself but also on the governance and controls used to determine investor classifications.

For many managers, consistency across administrators, distributors, and internal records may prove just as important as the underlying reporting obligation.

Liquidity remains a supervisory priority

Liquidity reporting is another area where the FCA is seeking greater insight.

Enhanced Reporting expands beyond high-level liquidity measures and seeks a better understanding of both asset liquidity and redemption liquidity. The regulator is also interested in how liquidity management tools operate in practice, including how frequently particular tools have been used rather than simply whether they are available within fund documentation.

This continued focus is unsurprising. Recent years have reinforced the importance of effective liquidity management across both retail and alternative investment products, and the proposed reporting requirements are consistent with that broader regulatory agenda.

Leverage, financing, and counterparty risk

Perhaps the most significant departure from Annex IV is the FCA's approach to leverage reporting.

Rather than relying on Gross and Commitment leverage calculations, the proposed framework focuses on the underlying drivers of leverage. Enhanced Reporting introduces more detailed requirements around financing arrangements, collateral positions, derivative activity, and counterparty exposures.

Importantly, the FCA is also proposing significantly more granular counterparty reporting. For some funds this includes reporting on key counterparties individually, identifying concentrations, and ranking counterparties according to their importance within financing arrangements and exposure profiles.

For firms that currently aggregate much of this information at portfolio level, implementation may require substantial work around data sourcing, reconciliation, and governance. This is likely to be one of the areas where operational readiness becomes as important as regulatory interpretation.

Detailed holdings reporting arrives in the UK

For UK UCITS managers and non-UCITS retail schemes (NURS), the introduction of holdings reporting will be an area of particular interest. The FCA proposes collecting detailed information on underlying portfolio positions, enabling it to gain greater visibility of portfolio composition, investment concentration, and market exposures. While many firms already maintain this information for portfolio management and investor reporting purposes, regulatory reporting introduces a different challenge. Information must be standardised, validated and capable of being submitted consistently in a structured format.

The FCA is not breaking entirely new ground with this change. Regulators in a number of European jurisdictions already receive comparable portfolio holdings information. In many respects, the proposals represent an alignment with international supervisory practices rather than an entirely new reporting concept.

Share classes and benchmarks under greater scrutiny

The template also provides the FCA with greater visibility over share class structures and benchmark usage within UK UCITS and NURS funds.

While the data fields themselves are relatively straightforward, the underlying regulatory intent is clear. The FCA continues to focus on transparency, value and product governance and appears keen to improve its ability to analyse these areas across the retail fund market.

Managers should therefore see these requirements as part of a wider supervisory picture rather than just another reporting obligation.

Private markets benefit from a more tailored approach

One of the more encouraging aspects of the consultation is that the FCA has avoided applying a single reporting model across all asset classes.

Private market funds are generally required to report information that aligns closely with how they are already managed and monitored. The proposals focus on areas such as committed capital, distributions, valuation practices, internal rate of return (IRR), Multiple on Invested Capital (MOIC), and loan portfolio quality rather than introducing entirely new measurement methodologies.

As a result, many implementation challenges are likely to centre on data ownership, consistency, and governance rather than the creation of new calculations. This reflects a pragmatic approach by the FCA and should help reduce unnecessary reporting complexity within private market structures.

Event-Based Reporting (EBR) should not be underestimated

Although much of FRAME focuses on periodic reporting, EBR is likely to have important operational implications for firms.

Under the proposals, certain hedge funds would be required to notify the FCA following specified drawdown events and provide detailed information relating to liquidity, risk, and loss drivers within tight regulatory deadlines. Subsequent updates would then be required over the following days.

In practice, this feels less like a reporting requirement and more like a governance and escalation requirement.

Unlike quarterly or annual submissions, EBR relies on a firm's ability to identify trigger events quickly, coordinate stakeholders, and produce decision-useful information within a matter of days. Firms potentially within scope should assess whether current monitoring and escalation procedures can meet those expectations.

FRAME – a broader transformation programme

Across the entire template, a clear pattern emerges.

The FCA is looking for fewer bespoke regulatory calculations and greater transparency over the underlying data that drives risk, performance, liquidity, and investor outcomes. The firms that are likely to be best prepared for FRAME are not necessarily those with the most sophisticated reporting tools, but those with the strongest understanding of their data, ownership structures, and governance processes.

What firms should be doing now

Although the consultation remains ongoing, there are several practical steps firms can take immediately, managers should:

• Assess which funds are likely to fall within the Enhanced Reporting population,

• Identify new data requirements, and

• Engage early with administrators, custodians, valuation providers, and technology teams.

Attention should be given to investor categorisation, detailed holdings data, and counterparty-level financing information, all of which may require data sources that have not previously formed part of regulatory reporting processes.

Most importantly, firms should resist the temptation to build entirely new reporting frameworks before the FCA finalises its proposals. In our opinion, much of the data required under FRAME already exists within Annex IV processes, investor reporting packs, risk monitoring frameworks, and operational reporting. The challenge is likely going to be connecting those sources effectively rather than starting from scratch.

Looking ahead

The final shape of FRAME will not be confirmed until the FCA publishes its final rules and technical standards. However, the proposed template already provides a strong indication of the regulator's direction of travel.

The FCA wants better quality data, greater consistency, and a more meaningful understanding of how funds operate. Larger funds should therefore expect increased transparency requirements, but also a more proportionate framework than the existing Annex IV obligations.

Buzzacott will continue to monitor developments, analyse emerging technical requirements, and share practical guidance through our FRAME insight series. Our objective is to help firms transition smoothly from Annex IV to FRAME and and make best use of existing reporting processes and controls wherever possible.

To explore the other articles in our UK AIFM regime series and keep up to date with the FCA’s proposed reforms, visit our series hub, where you will find detailed analysis of the latest consultation papers and what they could mean for your firm.