Public and private markets: Evolving asset management regulation 2026 report

The rapid growth of private markets continues to reshape where regulators focus their time, with priorities converging around valuation governance, fund liquidity, conflicts of interest, risk management and reporting.

In this year's edition of KPMG International's Evolving Asset Management Regulation report, KPMG professionals explore how evolving private markets are reshaping regulators' priorities to uncover opportunities and risks for asset managers.

The retailization of private assets is accelerating even as views diverge on its risks and benefits, while public markets reform continues and the European transition to T+1 settlement looms closer.

The shape of markets continues to change as private asset management expands at a rapid pace. Naturally, this has influenced where regulators are spending their time and resources.

David Neuenhaus

Global Sector Head of Private Capital and Asset Management

KPMG International

Key highlights

Priorities converge on valuation, liquidity, conflicts, risk and reporting

Retailization of private assets accelerates, with divergent views

Public markets regulation modernizes as European T+1 settlement approaches

Fund liquidity guidance is implemented, with MMF changes ahead

Private markets regulatory priorities

Private markets have grown rapidly in recent years. Some firms without a private markets capability are looking to build or acquire one in short order, while those with an existing footprint are looking to accelerate their growth. But this has inevitably attracted increasing regulatory scrutiny.

Valuation governance continues to be a particular focus area at the international level, with IOSCO publishing final recommendations on valuation in funds. And more broadly, national regulators continue to roll out expanded policy frameworks, targeted supervisory reviews and novel system-wide stress tests that aim to inform future work.

Download the full report to see how regulators are responding.

The retailization of private markets

Regulators around the world have introduced various fund vehicles to facilitate retail, high/ultra net worth and pension schemes' access to private markets.

The supervisory scrutiny on private markets is especially relevant to retail managers' arrangements in terms of valuation, liquidity management, governance and distribution..

Download the full report to see how different jurisdictions are approaching the regulation of private asset retailization.

Improving the effectiveness of public markets

Although much has been made of the rise of private markets, regulators continue to progress initiatives that aim to improve the functioning and effectiveness of public markets.

For asset managers dealing on European markets, the transition to T+1 settlement is rapidly moving from a distant milestone to a looming deadline. The EU, UK and Switzerland will move to the accelerated settlement window on 11 October 2027.

Fund liquidity management

Several years into a raft of international analysis and subsequent policy work from IOSCO and the FSB, national regulators are now uplifting their domestic regimes to bring them into alignment.

Requirements for money market funds specifically are also back on the agenda in Europe. Download the full report to see how different jurisdictions are updating their requirements.

Opportunities and risks

Potential opportunities
Possible risks for asset managers

Enhance private markets risk management capabilities

As private markets have grown, asset managers need to scale their first- and second-line risk management arrangements to keep pace and enhance their sophistication. Firms should look to move from manual controls to automation where possible, alongside implementing consistency across desks and products, to build capacity, resilience and clients' trust.
Roll out retail private asset products

As the retailization agenda picks up, firms will want to consider revisiting their product ranges and partnerships with distributors to ensure they are meeting client demand in a responsible manner.
Market efficiency

With markets around the world moving towards T+1 settlement, asset managers should be considering how they can best take advantage of opportunities to automate processes and reduce operational risks.

Increased scrutiny of private markets

Regulators are closely examining firms' capabilities and compliance in all the areas identified above. Firms with weak governance and oversight arrangements will be particularly exposed to regulatory challenges and interventions.
Liquidity management

As this topic has moved up regulators' agendas, firms need to be comfortable that their arrangements will function well in normal and stressed conditions, and that remaining and exiting investors will not be harmed. This is particularly important as private market product retailization picks up.
Regulatory reporting

Although simplification in some areas is welcome, regulatory divergence is increasing. Asset managers will need to ensure their systems are correctly configured to accurately report data across jurisdictions, taking into account IT development time and costs.