The U.K. Financial Conduct Authority (FCA) recently issued a so-called “portfolio letter” (Letter) to firms in the “custody and fund services portfolio,” which includes third-party custodians, fund depositaries, third-party fund administrators and transfer agents. The Letter’s purpose is to highlight the key risks that firms must manage “in order to protect investors and the integrity of the markets in which they operate.” Firms should expect the FCA to ask them about the actions they and their boards have taken “in response to this [L]etter to ensure that customers and markets are adequately protected,” the FCA cautioned. This article discusses the concerns raised in the Letter, with commentary and regulatory context from William Yonge, partner at Morgan Lewis. For more from the FCA, see “FCA Details Shortcomings of ‘Host’ Authorized Fund Managers” (Aug. 26, 2021).