PACE of regulatory change in fund management is slowing, despite growing scrutiny of the sector’s role in shadow banking, a flagship regulation report released today says.
A raft of post-financial crisis regulations have been inked over the past 12 months, giving managers greater certainty on what is expected of them, KPMG says in its annual study.
“There are definite signs that the regulatory fog is lifting,” KPMG partner Charles Muller said. “There is much greater certainty about the direction of regulatory travel and global regulation is slowly becoming more harmonised, which takes some pressure off firms,”
Flagship laws like the foreign account tax compliance act (Fatca), the packaged retail and insurance-based investment products (Priips), the Volcker rule and Ucits V have all moved to implementation phase this year, putting fund managers on a surer footing.
However, renewed scrutiny of funds’ role in the shadow banking sector by policymakers is likely to be the next battleground for fund managers.
“There will be increased pressure on data and reporting with both investors and regulators requiring more meaningful communication from businesses,” Muller added.
Roles traditionally performed by banks have been adopted by money managers, bolstering non-financial intermediation from $5bn two years ago to $71bn today.