Hello and welcome to our latest edition of Global News and Views, where we discuss
regulatory trends’ impact in the asset management industry. Historically, regulators have operated under a hive of activity, working towards common aims. But diverging views
and approaches are now emerging. We see this is especially
in asset management, which makes understanding the direction of regulatory thinking
particularly challenging. Our analysis points
to a number of key trends. These markers,
on an otherwise frenetic horizon, highlight a clear need to understand
developments holistically. So, what are the areas we really
need to pay attention to? We believe there are
three key emerging trends. As parts of the world attempt to deal with climate change, investors and managers have become more interested
in sustainability. And recently, the European Commission has created quite a buzz with new proposals
aimed at creating consistency in sustainable investment
across the E.U. The aim is to make
sustainable investing easier and less costly, and to help investors know which investments
are genuinely focused on environmental sustainability. Environmentally beneficial
investment can only be a good thing. But before this can be widely adopted, some firms may require a cultural shift. Culture and Conduct and the consequence
that gets them wrong are becoming more pronounced. Personal accountability
regimes are in place in the U.K., Hong Kong,
and Australia. There’s one on the way
in Singapore, and Ireland is considering its own. Existing regimes are also
extending their reach. For example, in the U.K. asset managers will soon
join banks insurers under the Senior Managers
& Certification Regime. With full culture and conduct
now linked to individual accountability, those captured need to understand
how they’ll be affected. Besides culture and conduct, technology is also changing the way we do business. From established firms
to new entrants, from IT giants to governments, fintech and regtech
are seen as the future, presenting opportunities
too good to miss. Add to this supervisory
technology, suptech, as regulators drive innovation
in machine-readable rulebooks and automated reporting. Meanwhile, crypto currencies and initial coin offerings continue to capture the imagination. Across financial services, technological innovation
appears unstoppable, and firms can’t afford to stand idly by less they be left behind. One of the drivers of rising
costs for asset management firms remains the volume and complexity
of global regulation. Identifying trends
within this environment remains critical,
enabling key decision makers to focus on what’s most important. In this edition of News and Views, we’ll look at the use of technology by asset managers and regulators as they seek to create
operational efficiencies and reduce costs. We consider the increasing interest in sustainable finance and the wider adoption
of ESG considerations, with a particular focus
on the environment, and we assess regulators adoption of regimes that aim
to hold senior individuals personally accountable
for their actions. In-depth articles
on these and other topics are supported by our new
themed infographics. We hope you enjoy Citi’s
latest Global News and Views.