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MiFID II is about to become very real for the asset management industry. We explore four of the most pressing issues at the forefront of everyone's mind.
Resetting the model
At the top of the list of concerns for the asset management industry is the inducement ban, target market rules, and distribution under MiFID II. Watch this session with Julie Patterson, Head of Asset Management, Regulatory Change at KPMG UK; Euan Munro, CEO at Aviva Investors; Jamie Hammond, CEO at AllianceBernstein Ltd; Peter Preisler, CEO, EMEA at T. Rowe Price; Neil Carnegie, CEO at Carnegie Fund Services and Alexander Schindler, President, EFAMA, Member of the Board at Union Investment.
ORMs to shake up investment research post-MiFID II
"There is a clear operational and compliance benefit to using ORMs; their ability to provide standardised and impartial research consumption and evaluation solutions (including reports) helps users meet their compliance obligations under MiFID II," says Benjamin Quinlan, CEO and Managing Partner of Quinlan & Associates. We chatted to him about the changes that we should expect from ORMs.
Is MiFID II just the start of the regulation inundation?
Firms have little option but to comply, so is compliance the cheapest option among increasing regulation? FATCA, UCITS IV and V, CSDR, MiFID II, AIFMD, Solvency II and Dodd-Frank were just some of the examples cited by panellists at FundForum Asia held in Hong Kong.
The challenges around regulation have not been helped by the fact that many financial institutions, particularly in Asian markets, have made disappointing progress towards automating their businesses. But efforts are being made to introduce disruptive technology to help financial institutions manage the inundation of regulation.
Existing cross-border business models are being called into question as three separate debates coalesce: supervisory convergence, third-country provisions and “Brexit”. Firms should plan for the rules and the supervisory approaches looking different in 2020 than today.
ESMA’s 2017 Supervisory Convergence Work Programme aims to promote sound, efficient and consistent supervision across the European Union. It commits itself and the national regulators to eight cross-cutting activities and seven thematic activities, one of which covers fund management and another the third-country regimes.
Will those national regulators that currently allow such share classes amend their approach, and if they do not, what will be the reaction of other regulators?
A recent example of ESMA’s supervisory convergence work was its guidance that hedged UCITS share classes (other than for currency) should not be allowed but instead should be separate funds or sub-funds. Any such existing share classes should be closed for investment by new investors by the end of July 2017 and for additional investment by existing investors by July 2018. Will those national regulators that currently allow such share classes amend their approach, and if they do not, what will be the reaction of other regulators?