Mon, Sep 26, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

KPMG report sees continuing regulatory challenges for investment managers

Tuesday, July 17, 2012
Opalesque Industry Update - In its fourth annual analysis of global financial regulations, KPMG, the audit, tax and advisory firm, says investment managers continue to face daunting challenges brought on by a changing global regulatory environment, which is fraught with unanswered questions and an array of differing rules in each region.

Observers, however, are beginning to see some consistency regarding the implementation of new regulations across the globe, with the U.S. and Europe setting the bar and Asia catching up.

“We are beginning to see progress toward more consistency with regard to global regulations but there still remains disparity in the regulatory requirements across the regions,” said John Schneider, head of KPMG’s Investment Management Regulatory practice in the U.S. and a co-author of the report.

“The goal is to reach a global connectiveness and consistency as to how regulations unfold, which is critical if we are to make sure the competitive landscape is not significantly altered,” Schneider added.

In the U.S., investment managers have been dealing with new regulations brought about by the Dodd Frank Act and other legislation, such as Advisor Registration, Form PF and Cost Basis Reporting, all of which require new forms of disclosure reporting and increased infrastructure needs.

The exhaustive 54-page report, titled “Evolving Investment Management Regulation: A clear path ahead?” examines the regulatory push in the investment management industry in the U.S., Europe, the Middle East, Africa and Asia, and involves an alphabet soup of government agencies and organizations. It says the “avalanche” of regulations is the result of two common objectives being pursued globally—protecting consumers and preventing another global financial crisis similar to 2008.

“Consumer protection and financial systemic risk mitigation are the driving forces for regulatory change that are being applied consistently. And while there have been delays in implementing many of the regulations on a global basis, taking the extra time has contributed to making them stronger and more workable,” Schneider noted.

The America’s Perspective
However, regulatory change may also lead to new growth opportunities for the industry.

“While there is significant pressure on the Investment Management industry today from individual and institutional investors for more transparency, this could very well lead to more opportunity for growth as investors’ confidence is strengthened,” said Jim Suglia, head of KPMG’s investment management sector, Global Advisory, and a lead editor of the report.

According to Suglia, regulators in the U.S. will keep a diligent and close watch as expanded registration, reporting and disclosure requirements continue to be implemented. Investment managers representing private funds, money market funds and new instruments will continue to be scrutinized with increased frequency and intensity of examinations.

“But the result could be positive as the mystique of certain investment instruments becomes much more clear to investors,” Suglia said.

Other key findings in the report:

  • Alternative Investments are under the spotlight with regard to financial stability and market transparency, with increased scrutiny of hedge funds and alternative investment vehicles.
  • Globally, attention is focused on institutional investors and products such as hedge funds, which were initially blamed for the financial crisis. This has led to measures that critics say go far beyond the amount of protection institutional investors actually need.
  • Offshore firms have their own set of challenges. Regulations from Europe and the U.S. will have notable implications for offshore centers.
  • Tax has been particularly prominent where authorities are facing unprecedented deficits. The avoidance of tax fraud has led to the FATCA regulation in the U.S., which has potential implications for all global firms.

“Evolving Investment Management Regulation – A clear path ahead?” can be downloaded by clicking here. The report is published by KPMG’s Financial Services Regulatory Centre of Excellence and builds upon last year’s report, “Meeting the Challenge.”

(press release)

About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative (“KPMG International.”) KPMG International’s member firms have 145,000 people, including more than 8,000 partners, in 152 countries.

fg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. North America - Acela fight splits hedge fund Connecticut and old money enclaves[more]

    From Bloomberg.com: Connecticut’s residential coastline is two worlds, the one of newcomer millionaires and one whose wealth and New England roots span generations. Now, their differences over a rail route threaten to gum up plans for the U.S. Northeast’s fastest-ever trains. About 30 miles from Man

  2. Activist News - Caesars offers creditors another $1.6bn, would spell end of hedge fund ownership, Activist investors double chance of CEO exits[more]

    Caesars offers creditors another $1.6bn, would spell end of hedge fund ownership From Calvinayre.com: Casino operator Caesars Entertainment has improved its offer to junior creditors to over $5b, but the offer is only good until Friday. On Wednesday, Caesars added an extra $1.6b to the $

  3. Nobel Sustainability Trust, Prince Albert II of Monaco help launch major new initiative to drive sustainable technologies[more]

    Matthias Knab, Opalesque: The Nobel Sustainability® Trust ("NST") is leading a major new initiative to finance, incubate and accelerate the development of clean technologies. The initiative will start with the formation of the Nobel Sustainability Fund® ("NSF"). NSF will drive faster access t

  4. Hedge funds saw four consecutive months of outflows in August, but assets still up by $17.6bn YTD[more]

    Komfie Manalo, Opalesque Asia: Hedge funds witnessed four consecutive months of outflows with investor redemptions totaling $23.8bn as of end of August, data provider Eurekahedge said in its monthly report. But total hedge fund assets grew by

  5. Trend reversals lead to losses as managed futures drops 1.52% in August[more]

    Komfie Manalo, Opalesque Asia: Trend reversals in August have led managed futures traders to lose 1.52% last month according to the Barclay CTA Index compiled by BarclayHedge. The Index is up 0.62% year to dat