The burden of the buy-side – and what you can do about it…

The regulatory burden is soaring for the buy-side as regulatory attention turns increasingly towards the regulation of the complex investment and funding markets that make up the area of non-banking finance intermediation (NBFI) – including asset managers, hedge funds and other players that make up much of our industry.

Not currently regulated by the frameworks that apply to licensed banks, the importance of these firms has grown to the point where they now represent around 50% of global financial assets. Unsurprisingly, therefore, regulators are raising concerns around their resilience – especially in today’s volatile post-Covid market conditions. Incidents such as the Archegos collapse, the London Metals Exchange nickel scandal and the LDI gilts crisis have shone a spotlight on the systemic risk this sector could potentially pose.

In the US, SEC chair Gary Gensler has been vocal in calling for increased oversight of hedge funds and other asset managers, and the US regulator recently passed new rules introducing significantly increased disclosure requirements for private funds (including the requirement to report risky events).

In Europe, the International Organization of Securities Commissions (IOSCO) and the Financial Stability Board (FSB) are also now working together, in a group co-chaired by the UK’s Financial Conduct Authority and the French Autorité des Marchés Financiers (AMF) to develop a set of concrete policy outcomes that could have serious implications for a wide variety of market participants: including asset managers, hedge funds, alternatives, and private markets in general. Added to the increasing complexity of ESG regulation and the challenges of data standardisation, the compliance burden for the buy-side is soaring.

But first – not everyone is aware of this new direction, and second, not everyone is prepared for it. With limited resources and significant existing requirements to meet, not every firm has the same ability to meet these increasingly onerous requirements. How can your controls function at as a gatekeeper, what are the biggest issues on the horizon, and how can you most efficiently meet them?

Join panelists including:

• Claire Fenech, head of front office controls and governance at Janus Henderson Investors;
• Stuart Liddle, senior manager, first line controls, Invesco; and
• Steven Strange, head of product (asset management), ION Group.