Compliance priorities for VC firms in 2026
- Adempi
- 1 day ago
- 4 min read
Venture capital compliance in 2026: a lighter rulebook is on the horizon but so is heavier scrutiny. Here's what you need to review before the FCA does.
There is increasing regulatory interest in private markets and significant emphasis on ensuring good governance, transparency and investor confidence.
That makes it more important than ever for VC firms to ensure their compliance frameworks remain fit for purpose.
As we move through 2026, there are several areas that many VC firms may wish to review.
Reviewing conflicts of interest frameworks
Conflicts of interest have always been an important consideration but for venture capital firms it has never been a hotter topic. There has already been detailed feedback from the FCA on conflicts and valuations, and the regulator is currently in the middle of supervisory work on conflicts for this sector.
The challenge? Conflicts policies gather dust. Even when business evolves—new funds, expanded strategies—the policy stays static.
That's a problem. Your framework might no longer reflect how decisions are actually made.
A regular conflicts review helps you check: Do your policies still match how your business actually operates? Or have new funds, strategies, or team structures left your framework behind?
Policies remain aligned with current business activities.
Potential conflicts are identified early.
Decision-making processes are clearly documented.
Appropriate governance and oversight are maintained.
Given the ongoing work in this space, we’re advising our VC clients that ensuring that their approach to conflicts is where it should be in 2026 is a top compliance priority. And looking beyond pleasing the regulator, conflicts management can build value in the business.
An effective conflicts framework isn't just about ticking regulatory boxes. It builds investor confidence—showing them that potential issues are managed consistently and transparently, every time.
Co-investment arrangements deserve ongoing attention
Co-investment is back. As the market swings toward single-company investments, more VC firms are offering co-investment opportunities—or building services specifically around them.
Co-investment adds value—but only if you have the right FCA permissions in place. And once you do, you're likely running multiple policies, monitoring adherence across different investor groups, and managing complexity that didn't exist before.
And then there are the practical considerations. Whether opportunities are allocated between funds, portfolio companies or individual investors, there’s more risk. Cherry picking. Information asymmetry. Perception of bias.
Firms need to be hot on their allocation process so that they can demonstrate that their processes are fair to all concerned, their rationale is consistent and everything is appropriately documented.
Questions firms may wish to consider include:
Does the allocation policy envisage the types of scenarios that the firm will face. (Pre-deciding how to handle situations builds trust and proves consistency.)
Have you considered all interested parties when forming your rationale?
If individuals are involved, have you applied a Consumer Duty lens—not just a fairness test?
Would a third party understand how decisions were reached—and be convinced by the rationale?
Good documentation does two things: it supports strong governance, and it makes life easier when the FCA comes calling. If you can show clear rationale and consistent process, supervisory conversations become straightforward—not stressful.
Investor communications continue to matter
Regulatory expectations don't stop at policies and procedures. Your investor communications matter too—and they're a key trust-builder.
Are your reports clear, accurate, and timely? Do they reflect investment activity, risks, and material developments honestly and consistently?
Investor reporting isn't just a compliance tick-box. It's how you build trust—and it needs to be consistent, transparent, and backed by proper controls that ensure communications accurately reflect investment activity, risks, and material developments.
Most firms have solid reporting processes. But when did you last review them? A periodic check can spot gaps, improve consistency, and reduce operational risk before problems emerge.
Paying attention to supervisory signals
While regulatory rules may not change dramatically from year to year, supervisory focus can evolve.
Keeping an eye on the themes highlighted through FCA communications, market commentary and supervisory activity can help firms understand where additional scrutiny may arise and whether existing controls remain appropriate. If you’ve fallen behind with this, the Regulatory Priorities Report will bring you up to speed (asset managers will want the ‘Wholesale Buy-Side’ report).
Don't wait for a regulatory review to expose weaknesses. A proactive assessment lets you identify issues early—and fix them before they become enforcement cases.
Looking ahead
The regulatory environment for venture capital firms continues to evolve. Expectations around governance, conflicts management, documentation and investor communications are becoming increasingly important, regardless of firm size.
Taking the time to review compliance frameworks now can help ensure they remain proportionate, effective and aligned with both regulatory expectations and the firm's long-term objectives.
Get in Touch
Need a head start? If you're reviewing your compliance framework and want a practical sounding board, we're here for a no-pressure conversation. We'll help you spot gaps, test your thinking, and prioritise what matters most. You can reach us at contact@adempi.co.uk or on 0203 925 4761
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