Regulation between the US and the rest of the world is diverging according to KPMG’s 2018 Evolving Asset Management Regulation report.
The report finds that while Europe and some ASPAC countries continue at a pace with implementing post-crisis regulations and proposing yet more legislation for asset management, the US is taking a different path on new regulations and withdrawing some rules for mutual funds.
However, around the globe supervisors are increasing resources and harnessing new technology, KPMG finds. Earlier this year, for example, the SEC signalled a growing number of visits to investment firms as it moves towards a “broken windows” approach; believing that minor violations can signal larger infringements.
Julie Patterson, author and head of asset management regulatory change, KPMG, said: “Asset managers in Europe and Asia aren’t seeing any let-up in the volume of regulations they face, while the US takes a different path. A clear example of the diverging approaches can be seen in the debate on asset management and systemic risk. Europe and ASPAC are following the 14 recommendations of the Financial Stability Board on liquidity management and leverage, whereas the US rejects the need for stress testing of mutual funds.
“Whilst for most regulatory bodies across the world, the twin peaks of financial stability and investor protection continue as priorities, a new theme is also emerging: competitiveness. Regulatory barriers to cross border business are being addressed and new competitive fund structures are being introduced. Asset managers will have to navigate an increasingly complex regulatory landscape for some time to come.”
Providing tax, audit and advisory services, KPMG operates from 22 offices across the UK with approximately 14,500 partners and staff, the firm recorded a revenue of £2.2 billion in the year ended 20 September 2017.