This is the eleventh edition of the annual flagship report on regulation of the global asset management industry: Evolving Asset Management Regulation 2021 — Through a new lens.
The pursuit of economic growth, changing investor demands and behaviors, and environmental and social concerns are continuing to influence regulatory agendas. Of paramount importance are financing sustainable recovery and adjusting regulation for an increasingly digital world and hybrid working models. Policymakers and industry are looking at issues through a new lens in the light of the impacts of the pandemic and this new landscape.
Market events in 2020 and ongoing concerns about stability in the capital markets are causing regulators to reassess risks and redefine resilience. Good governance and appropriate investor protection remain regulatory imperatives and are being reinforced and recalibrated. There is even closer supervisory scrutiny in retail markets, but an easing of regulations for professional clients.
Regulation is also enabling new market opportunities. New fund vehicles are being introduced as jurisdictions compete for share of market growth, private and real assets are being accommodated to aid economic recovery, and newer capital markets are opening further to foreign investment and firms.
Key questions for CEOs
Do we have a clear, robust and nimble ESG strategy, supported by our governance arrangements, risk management, investment process, data capabilities and disclosures?
Are we identifying, measuring and managing risks arising from new technologies and increased digitalization? Are we using technology effectively, to enhance client services and run our business more efficiently?
Have we critically analysed experience during the 2020 market stress and reassessed liquidity risk management for each open-ended fund? Do our policies, controls and documentation meet supervisory expectations?
Is operational resilience a business priority and integral to our business strategy? Have we identified critical business services, from the perspectives of the firm and potential impacts on stakeholders, and are our third-party relationships well-managed?
Do we have effective Board engagement and supporting governance arrangements? Are our risk management framework and controls fit-for-purpose given continued remote working? Are our product governance arrangements subject to robust and objective challenge, and delivering good investor outcomes?
Can we evidence a client/investor-centric approach throughout our business? Do we seek to minimize costs incurred by clients/investors and to maximize the value of our services and funds? Are all our disclosures and marketing clear, fair and not misleading, and would they stand up to independent scrutiny and challenge?
Are we considering opportunities to invest in new markets and asset classes or to use new fund vehicles? If yes, do we have the necessary skills and resources?