What’s on the regulatory horizon for asset managers?


While it may feel like we had surveyed and scaled a mountain of legislation that brought profound changes to the financial markets over the last several years, we now find ourselves facing a new challenge and a period of uncertainty.  Although the EU is moving to a phase of legislative consolidation and review, fundamental questions have been raised in the UK by the Brexit vote, as well as by greater volatility in the wider world. Ensuring compliance with the current framework, while keeping a close watch for the direction of future developments will put asset managers in the best position to meet the challenges and opportunities thrown up by this changing landscape.

The coming year will see developments in:

  • Senior Managers and Certification Regime – For the time being, asset managers are outside of the new regime, however the FCA has promised that an extension to that regime to make it applicable to all FSMA authorised firms will come into effect in 2018;
  • MiFID II – Asset managers will need to consider how they can continue to receive research without it amounting to an inducement under MiFID II, and the FCA’s decision to expand the application of a number of the MiFID II/MiFIR requirements to AIF, CIS and UCITS managers, gold-plating the wording of the MiFID II text;
  • Asset Management and Competition – The FCA will be publishing the final report on their asset management market study in early 2017, along with any final remedies and proposed amendments to the rulebook. The FCA’s interim report published in November 2016 highlighted a number of concerns in relation to the effectiveness of competition in the asset management industry;
  • FSB on Stability – the FSB released a policy recommendation paper, containing recommendations to address four areas identified as structurally vulnerable in January 2017;
  • Transparency – The trend towards increasing transparency will continue in 2017, and asset managers will need to be aware of EU initiatives such as amendments to the Shareholders Rights Directive, the Securities and Financing Transactions Regulations and the AIFMD review;
  • PRIIPS – The delivery of the final Level 2 requirements following a delay due to disagreement between the European Commission and the European Parliament and the Council.

We also look at enforcement trends, Brexit and a general round-up of other news of interest to asset managers.

Please click here to access the full version of our report.