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By Beverly Chandler, Opalesque London

Noel Amenc, professor of finance and director of the Edhec-Risk Institute and Samuel Sender, applied research manager have conducted a study as part of the Risk and Regulation in the European Fund Management Industry research chair, in partnership with CACEIS, the asset servicing banking group of Credit Agricole, and have revealed that non-financial risks and failures have impacted the regulatory agenda in Europe. Beyond that, the study looks at the management of liquidity, counterparty, compliance, misinformation and other non-financial risks in the fund industry.

Amenc and Sender’s findings show how convergence between the individual regulatory regime of each European country can be achieved and also assesses how investors holding units in funds can best be protected with appropriate regulations, improved risk management practices and greater transparency.

The study finds that the Ucits directive has failed to make adequate allowances for the operational consequences of financial innovation.

“Although investment funds have diversified internationally, made growing use of derivatives and other sophisticated strategies, and evolved in other ways, and although EU regulations and recommendations have recognised or even favoured these changes, they have failed to do studies on their impact and have failed to modify regulation accordingly” the study says.

Due to what it describes as ‘the vagueness’ of the EU de......................

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