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What’s happening?

Asset managers may well have to endure a wave of new regulatory pressures when the current economic crisis subsides.

Over the course of the 11-year bull market, which has been supported by ultra-loose central bank policy, the funds industry has become increasingly multi-faceted and offers a wider range of mandates, often investing in complex and higher-risk assets.

According to research from the Financial Times recently reported in the press, assets managed outside the global banking industry now amount to more than $180trn, which is 20% more than is currently being held by banks.

While the asset management industry has been hit with waves of new regulation since the 2008 crisis, its rapid growth in assets over that period has moved regulators to increasingly contemplate the idea of imposing the label of “systematic importance” on the sector. This label would require the imposition of far more stringent controls, as seen in the banking industry.

What do you need to do?

The pan-European regulator ESMA recently signalled its intention to impose on the asset management industry further stress testing and testing of liquidity management tools and leverage. With the FCA’s 2020 business plan also concluding that harm in the sector is caused by factors including poor governance, insufficient focus on delivering good value, and lack of investment in technology and operational resilience, now more than ever is a good time for asset managers to focus on the basics of financial and operational governance.

How can we help you?

If you’d like to know more about regulatory expectations of the fund sector or any other aspect of FCA compliance, our expert team is here to help. Contact us today on 0207 436 0630 – or email info@thistleinitiatives.co.uk.