mast image

Special Report

Impact investing

Sections

Fund managers increasingly worried about risk of 'inappropriate' regulations

Related images

  • Fund managers increasingly worried about risk of 'inappropriate' regulations

EUROPE - European fund managers are increasingly concerned about the implementation of "unclear" or "inappropriate" regulations that could increase non-financial risk, according to a survey conducted by the EDHEC-Risk Institute.

At present, the non-financial risks foremost in respondents' minds are the growing sophistication of operations (77%) and the reduced capacity of some intermediaries to guarantee deposits (59%), EDHEC said.

However, its survey - entitled 'Shedding light on non-financial risks' - also highlights fund managers' growing concerns over new regulations coming into the market, notably the Alternative Investment Fund Managers (AIFM) Directive.

Survey respondents said "transparency, information and governance" remained the top priorities for the regulation of non-financial risks. More than 90% said the regulator must ensure information was "genuinely fair, clear and not misleading".

In addition, respondents acknowledged that the industry had its own financial responsibility, with 53% denouncing the total absence of responsibility of management companies regarding restitution.

Responsibilities for the restitution of assets should be contractually defined between depositaries and asset managers, according to the fund management industry, with 68% saying this should be done at the creation of the fund.

Moreover, the depositaries should only be "unconditionally" responsible for the assets that they actually control, they said.

In the area of distribution, more than two-thirds of respondents were in favour of clarifying responsibilities according to who controls the information, with distributors having a role to play as the first line of defence for investors.

As a result, the costs of stronger protection should be largely supported by the industry and would not be totally transferable to investors, respondents said.

Strengthening the regulation would therefore result in a net cost for asset managers, depositaries and custodians, according to EDHEC.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2548

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 300-400m.
    Closing date: 2019-07-30.

  • QN-2549

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 300-700m.
    Closing date: 2019-07-30.

  • QN-2550

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2551

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2552

    Asset class: Fixed Income, High Yield (Active).
    Asset region: High Yield (US).
    Size: CHF 500-600m.
    Closing date: 2019-07-29.

  • QN-2553

    Asset class: Fixed Income, High Yield (Passive or Passive Enhanced).
    Asset region: High Yield (US).
    Size: CHF 500-1'100m.
    Closing date: 2019-07-29.

  • QN-2554

    Asset class: Global Real Estate (Equity, unlisted Funds).
    Asset region: World (ex-Switzerland).
    Size: CHF 200 mn (potential for further growth).
    Closing date: 2019-08-07.

  • QN-2555

    Asset class: Real Estate.
    Asset region: European.
    Size: EUR 50 - 100 million.
    Closing date: 2019-07-22.

  • QN-2556

    Asset class: FX Hedging.
    Asset region: Global.
    Size: Mandate size of CHF 1.5 bn.
    Closing date: 2019-08-09.

  • QN-2557

    Asset class: All/large Cap Equities.
    Asset region: China A-shares.
    Size: Unit linked platform (0m USD in initial investment).
    Closing date: 2019-08-01.

Begin Your Search Here
<