Reed Smith In-depth

Key takeaways

  • In its review of private market valuations, the FCA found that firms need to improve processes for identification and documentation of potential conflicts of interest.
  • The FCA found weakness in governance, identifying, documenting and addressing conflicts of interest, and having defined processes for carrying out ad hoc valuations.
  • Following this review and the publication of its findings, the FCA launched a wider review into conflicts of interest.
  • In anticipation of the FCA’s increased focus on this area, firms should ensure that their conflicts of interest policies are implemented with appropriate rigor, taking account of the FCA’s findings.

Authors: Romin Dabir Brendan Gallen Laura Neuhaus

Background

On 5 March 2025, the UK Financial Conduct Authority (FCA) published a report outlining its findings from an earlier review conducted on private market valuations (Valuations Review).

One of the main outcomes of its Valuations Review was that firms need to improve processes for the identification and documentation of potential conflicts of interest in their valuations process to increase the independence of their valuation functions.