Evolving Investment Management Regulation

Evolving Investment Management Regulation

KPMG’s 2016 Evolving Investment Management Regulation report finds the industry under closer regulatory scrutiny.

KPMG finds Investment Management industry under closer regulatory scrutiny.

The investment management industry performs a critical role in channelling finance to drive economic growth and to support saving by aging populations. As it continues to gain in size and importance, however, it is coming under ever closer regulatory scrutiny. In addition to continuing questions about systemic risk, it is being challenged to justify and reduce its charges and to control other costs paid for by clients. Long-standing arrangements between firms and intermediaries are being made transparent, the volume of new regulation is operationally challenging and requires fundamental changes to firms’ business models, and regulators are issuing a steady stream of information requests. 

At the same time, the investment pie is growing. New capital markets are opening and new fund passports and products are being introduced. Governments are encouraging their citizens to provide for their own retirement and to save in order to spend. Investment funds will likely be the underlying investment components for much of this new business, increasing monies managed by the industry and intensifying the search for investible assets.

Firms need to respond constructively to this closer scrutiny. They need to engage in open and positive dialogue with regulators, be open to challenge, rectify misconceptions and highlight unintended consequences. Successful firms will demonstrably act in their clients’ best interests and, by being on the front foot, will secure a larger slice of the growing investment pie.

 

Key questions for CEOs

  • Are we open to challenge about our business model and activities?
  • Are we engaged in constructive dialogue with the regulators?
  • Is the culture of my firm focused throughout on the customer?
  • Are we controlling the costs and charges borne by our customers?
  • Are we on top of what is coming down the regulatory pipeline?
  • Are we spotting the new opportunities arising from regulatory change?

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Intensive focus on culture and conduct of investment firms

Investment management code and conduct focuses on acting fairly to customers.

 
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Cost and charges: regulatory prescription

Regulators are seeking more disclosures on costs and charges.

 
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Turning up the heat on product governance

Globally, regulators are taking a similar approach.

 
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Technology – will regulators become robo-cops?

Regulators are looking at FinTech and extending the regulatory perimeter.

 
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Rising cyber threat prompts regulatory reaction

Rapidly evolving technology and the proliferation of data constitutes a growing risk.

 
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Systemic risk debate deepens

International bodies and agencies contribute to the ongoing policy debate with regulators.

 
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Wealth Management

We offer services to superannuation funds, life offices, employers and fund trustees.

 
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Evolving Investment Management Regulation 2015

Our report looks at the key regulatory issues facing the industry on a global scale.

 
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John Teer

John’s career has spanned financial services audit, wealth management and time as CFO.

 
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Tom Brown

Tom has been a Partner in KPMG’s Financial Sector Practice in London since 1999.

 
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