RegsRadar webinar highlights

European regulation is becoming more layered, more data-driven and more focused on how firms operate in practice. For asset managers, the challenge is moving beyond interpreting and applying the rules – it is now about managing how multiple regulatory initiatives interact and intersect across jurisdictions, timeframes and operating models. 

In a recent webinar hosted by Robin Cotterill, Carne’s Chief Compliance Officer, Des Fullam, Chief Regulatory and Client Solutions Officer and Selma Ulusoy, Conducting Officer and Head of Compliance, Carne Luxembourg, unpacked the key regulatory developments from the first quarter of 2026 and highlighted what firms should be prioritising in the months ahead. 

The discussion highlighted a shift from regulatory change as a series of discrete events to a more continuous state of execution – where centralisation efforts, AIFMD 2 implementation and increased supervisory scrutiny are overlapping and, in many cases, compounding the operational burden rather than reducing it. 

Europe’s push towards centralisation is adding complexity before delivering benefits 

Concerted efforts towards regulatory centralisation across Europe, driven in part by policy initiatives aimed at improving competitiveness and strengthening the single market, are yet to translate into simplification or efficiency. 

As Selma Ulusoy noted, firms are still required to meet local regulatory expectations alongside new EU-level requirements: ‘Centralisation […] will bring harmonisation and data gathering at EU level. It’s not yet simplification in practice. We are still reporting for CSSF or CBI as much detail as before – sometimes with different timelines and different levels of information.’ 

The result is a transitional phase where firms must manage duplication, reconcile differences across jurisdictions and respond to increasingly sophisticated regulatory analysis. Regulators are also becoming more data-driven, using technology to interrogate submissions more deeply and ask more targeted questions. 

For now, centralisation appears to be adding another layer to an already complex regulatory environment – with the benefits of harmonisation only expected to materialise over the medium to long term. 

AIFMD 2 has moved from planning to execution – with interpretation still evolving 

With implementation deadlines now passed in many jurisdictions, AIFMD 2 is now an operational reality. Encouragingly, most firms appear well prepared. However, the discussion highlighted that the real challenge lies in interpretation and execution – particularly in areas where regulatory guidance has been limited. 

As Selma Ulusoy explained, even small changes in wording have created significant uncertainty across the market: ‘We had long discussions around very small areas of AIFMD 2 […] everybody was wondering how much detail was required, and no one wanted to be the first to take a position.’ This has been compounded by uneven implementation timeframes across jurisdictions and ongoing legislative processes in some markets. 

From a practical standpoint, areas such as loan origination rules, liquidity management tools and disclosure requirements are demanding closer attention. As Des Fullam pointed out, the impact may not always be immediate but requires careful forward-looking analysis: ‘Broadly speaking, on a day-to-day basis, these rules won’t make a huge impact – but firms do need to think about how they apply over the life of the fund.’ 

Now execution is live, firms are balancing the need to embed the new rules in their operating models with continuing to navigate areas of ambiguity as interpretations evolve. 

Supervisory scrutiny is intensifying, focusing on substance over form 

In Ireland and Luxembourg alike, regulators are placing increasing emphasis on the practical application of frameworks rather than the theory. Delegation, governance and valuation practices are emerging as key areas of focus. Regulators are seeking greater transparency on how oversight is exercised, including the resources dedicated to monitoring delegated activities and the robustness of valuation processes. 

As Des Fullam noted, upcoming feedback from regulatory reviews is expected to further shape market expectations: ‘The regulator really wants to understand exactly how the market works […] and whether oversight is being retained appropriately by management companies.’ 

At the same time, broader themes such as operational resilience, data governance and the implementation of frameworks like DORA are moving up the supervisory agenda. Crucially, scrutiny is becoming more detailed and data-led, requiring firms to demonstrate consistency across jurisdictions and provide clear explanations for any divergence in approach. 

Looking ahead 

The pace of regulatory change refuses to slow – and its nature is evolving rapidly. 

Centralisation, new directives and heightened expectations are converging to create a more complex operating environment, where firms must manage multiple layers of oversight while maintaining consistency and control. 

That’s creating complexity in the short term – although over time, greater harmonisation and clarity may emerge. The panel agreed that the real challenge for asset managers in the coming months is in meeting the growing expectations on demonstrating how frameworks operate in practice, because that’s where regulators are turning their focus. 

For more insights from the discussion, watch the full recording.