This jargon buster sets out some of the key acronyms and buzzwords we expect to be hearing this year
ACSP
Authorised Corporate Service Provider.
AI Act
An EU Regulation which aims to create a new regulatory framework for the development and deployment of artificial intelligence (AI) across the EU.
AIF
Alternative Investment Fund.
AIFM
Alternative Investment Fund Manager, being the legal person whose regular business is managing one or more AIFs.
AIFMD
Alternative Investment Fund Managers Directive – an EU directive which governs the activities of AIFMs (a UK version also applies in the UK).
AIFMD II
EU Directive amending certain provisions of AIFMD.
Consumer Composite Investments (or CCIs)
The new retail investment product under the new UK Retail Disclosure Regime.
CS3D
Corporate Sustainability Due Diligence Directive – an EU directive which increases companies’ responsibility for their environmental and human rights impacts occurring within their business, their corporate group and their business relationships.
CSRD
Corporate Sustainability Reporting Directive – an EU directive which requires companies to prepare a detailed sustainability report on a broad range of ESG topics and to obtain assurance of the report.
CTP
Critical Third Party. New rules allowing the UK Government to designate certain suppliers of key services to the financial sector as CTPs which took effect from 1 January 2025. UK financial services supervisory authorities are able to regulate businesses which have been designated as CTPs directly, even though they are not carrying out financial services activities requiring authorisation. The aim is to ensure that CTPs meet minimum resilience standards, with a view to reducing systemic risk to financial markets. See this briefing for more information.
DB pension scheme
Defined benefit pension scheme.
DC pension scheme
Defined contribution pension scheme.
DEI (or DE&I)
Diversity, equity and inclusion.
D&I
Diversity and inclusion.
DORA
Digital Operational Resilience Act – an EU regulation creating an information and communication technology (ICT) risk management framework for the EU financial sector.
DUA Bill
Data (Use and Access) Bill. Will make limited reforms to UK data protection framework. Also covers data sharing and digital verification schemes. See this briefing for more information.
ECCT Act or ECCTA
Economic Crime and Corporate transparency Act 2023.
EEA
European Economic Area.
ELTIF
European Long Term Investment Fund.
ELTIF 2.0
Version of the ELTIF that became available on 10 January 2024.
ESAs
European Supervisory Authorities – the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority.
ESG
Environmental, social and governance.
ESRS
European Sustainability Reporting Standards, the reporting standards required under CSRD.
ESTA
The USA’s Electronic System for Travel Authorization.
ETA
Electronic Travel Authorisation – a new electronic ‘permission to travel’ requirement being introduced in the UK for all non-UK passport holders travelling to the UK for business or leisure without a visa.
ETIAS
European Travel Information and Authorisation System – a new electronic ‘permission to travel’ requirement being introduced in thirty European countries for those travelling for business or leisure without a visa.
EU Whistleblowing Directive
An EU directive which requires member states to provide whistleblowers with effective channels to report breaches of EU rules as well as protection against retaliation for doing so.
FCA
Financial Conduct Authority (UK).
Foreign Subsidies Regulation (FSR)
Rules that enable the European Commission to address distortions caused by foreign subsidies, with the aim of ensuring a level playing field for all companies operating in the EU Single Market. These rules include, amongst other things, a mandatory notification regime for certain transactions and public procurement contracts.
General-purpose AI system
An AI system that has the capability to serve a variety of purposes, both for direct use as well as for integration in other AI systems.
Generative AI
Deep-learning models that can generate high-quality text, images, and other content based on the data they were trained on.
GloBE Rules
Global Anti-Base Erosion rules that, broadly, establish a global minimum corporate tax rate of 15% for multinational enterprises that meet a €750m revenue threshold.
GP stake sale
Essentially the sale of a minority equity investment in a fund management business (the “GP”), which allows the investor acquiring the stake to participate in the revenue streams generated by the GP from its underlying funds.
Green agreement
Broadly, for the purposes of UK competition law, an agreement between competitors aimed at preventing, reducing or mitigating the adverse impact that economic activities have on the environment or assisting with the transition towards environmental sustainability. The EU takes a wider view of so-called ‘sustainability’ agreements, including also objectives addressing human rights, ensuring a living income and fostering resilient infrastructure and innovation.
Greenwashing
The process of conveying a false impression or misleading information about a company’s environmental credibility.
HMRC
His Majesty’s Revenue and Customs. The UK’s tax authority.
ICT
Information and Communication Technology.
IDV
Identity verification.
ILPA
Institutional Limited Partners Association.
ISSB
International Sustainability Standards Board, an independent body created by the International Financial Reporting Standards (IFRS) Foundation to prepare international sustainability reporting standards.
JPUT
Jersey property unit trust.
LGPS
Local Government Pension Scheme (England and Wales).
Loan Originating AIF
An AIF: (i) whose investment strategy is mainly to originate loans; or (ii) where the notional value of the AIF’s originated loans represents at least 50% of its net asset value.
MiFID investment firm
A firm which carries on certain activities (which could include portfolio management, advising and/or arranging) and is regulated under the Markets in Financial Instruments Directive II.
NICs
National Insurance Contributions. The UK’s social security contributions.
NSIA
The UK’s National Security & Investment Act.
Omnibus
A law which amends or repeals several different existing laws. Currently associated with plans to revise CSRD, CS3D and the taxonomy regulation.
PAIs
Principal Adverse Impacts, a range of ESG factors specified in SFDR which indicate the ESG credentials of a portfolio.
Pillar Two
The element of the OECD’s Base Erosion and Profit Shifting (BEPS) Project that has given rise to the GloBE Rules.
PISCES
Private Intermittent Securities and Capital Exchange System, a new type of regulated trading platform expected to be introduced in the UK in 2025.
Portfolio manager
Person who manages investments on a client-by-client basis.
Predictive AI
The use of machine learning to identify patterns in past events and make predictions about future events.
PRIIPs
Packaged Retail Investment and Insurance-Based Products.
Productive assets/investment
Investment that can contribute to national economic growth, including public and private equity, real estate, farmland and infrastructure.
PSCs
All persons (whether or not in the UK) who have or exercise significant control over a UK company or an LLP.
QRSI
The Institutional Limited Partners Association Quarterly Reporting Standards Initiative which aims to deliver the next evolution of ILPA quarterly reporting.
Qualifying carried interest
From April 6 2026, carried interest that will meet the conditions necessary to be subject to an effective rate of UK tax (including NICs) for UK tax residents of around 34.1% (rather than 47%, which will apply to non-qualifying carried interest).
RIF
Reserved Investor Fund (Contractual Scheme), a new UK fund vehicle that the UK government has confirmed will be introduced.
Run-on
Refers to a pension scheme continuing to be run by the trustees and investing in return-seeking assets, rather than ‘de-risking’ by securing liabilities with an insurer or transferring to a commercial consolidator.
SDR
Sustainability Disclosure Requirements, the UK’s sustainable finance labelling regime, with broadly similar aims to SFDR.
SEC
The Securities and Exchange Commission (of the USA).
SFDR
Sustainable Finance Disclosure Regulation – the EU regulation which sets out sustainability disclosure requirements for certain financial services firms.
Taxonomy Regulation
Establishes the EU Taxonomy by setting out the conditions that an economic activity has to meet in order to qualify as environmentally sustainable.
TCFD
Task Force on Climate-Related Financial Disclosures.
Transparency
In the context of AI this term means providing information to ensure that users understand that they are interacting with AI.
Value chain
Key term under CSRD, describing upstream and downstream business relationships and determining the extent of reporting obligations under the directive; “chain of activities” is a similar concept under CS3D.
Whistleblowing
Refers to a person disclosing information that they reasonably believe is in the public interest and shows some form of wrongdoing.
