2014 could be the year that the investment industry’s increasing regulatory burden begins to carry its own weight, says KPMG.
In a new report titled: Evolving Investment Management Regulation, the consultancy argues that many of the regulatory proposals that have spent years slowly working their way through the system are finally reaching the implementation phase and this move has at last begun to create clarity around the operating environment.
In addition to this, KPMG says: “Many regulators around the globe appear to be co-ordinating their efforts as the initial rush of regulation becomes a more thoughtful and streamlined process.”
“Where there was once disparity between regulatory initiatives, pan-regional organizations such as iOscO, the fsB and the OecD have started to close the gaps in rulemaking in an attempt to create coherence,” it added.
According to KPMG, while the implementation of all of the new regulation poses its own challenges, not the least of which is cost, there are a number of benefits to be found: particularly, “greater investor protection, systemic protection and the opportunity to distribute regulated products to a wider client base”.
One of the other implications, KPMG says, is that: “talented traders will no longer have access to bank balance sheets and will increasingly migrate out of banks and end up somewhere in the asset management continuum.”
“This is positive for asset managers, but also brings them closer to the centre of the financial wheel. at the centre, they are likely to find that scrutiny becomes much more intense as they are increasingly considered systemically important institutions,” it says.
But, it adds: “Those industry participants who realize that the wheel has finally turned will be in a great position to take advantage of the opportunities ahead in the age of asset management.”
