InvestOpsDaily
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THE OFFICIAL NEWSPAPER OF INVESTOPS 2019
REGULATION
Asset managers wary of potential
new regulatory reporting regime
A POSSIBLE REVIEW OF REPORTING REGULATIONS COULD BE AN ADDITIONAL BURDEN ON ASSET MANAGERS AND
PRESENT A “SIGNIFICANT DANGER” ACCORDING TO ONE EXPERT.
E
fforts by regulators to review the current
regulatory reporting framework has Europe-
an asset managers worried that it would result
in increased costs and a greater operational
burden.
The next European Commission has high-
lighted there will be a review of certain aspects
of regulations including MiFID II and AIFMD,
particularly around the reporting process.
However, one asset manager speaking at the
InvestOps Europe conference is concerned that
while the intent from the regulators is good,
the outcome could be damaging.
“After the review, we may end up with
additional elements of reporting, on top of
the already heavy burden of AIFMD and MiFID
transaction reporting to regulators,” said
Stephane Janin, head of global regulatory
development, AXA Investment Managers.
“In this case, we would prefer to keep the ex-
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INVESTOPS DAILY
isting reporting regime. We are concerned that
if it will lead to new fund reporting require-
ments, it will generate a significant amount of
cost at a time where we want to keep fees low.
It presents a significant danger.”
Patrick Pearson, head of financial market
infrastructure and derivatives at the Euro-
pean Commission, highlighted that the body
is underway with a project to map out how
data is reported to each national regulatory
authority, and identify ways to streamline the
process and make it more efficient. However,
there is some contention between the EU27 on
what areas of the reporting process should be
scrapped.
“Each regulator has a different perspective
on reporting in order to carry out their statu-
tory requirements. There has been difficulty in
agreeing over what to scrap. We intend to have
a serious discussion on this, which we hope
will come to fruition,” said Pearson.
Asset managers are already gearing up for a
new set of reporting rules on their securities
finance transactions under SFTR, which will
go live for them in October last year. They will
also have to prepare for money market fund
reporting as of Q1 2020.
As buy-side firms mature their reporting pro-
cesses to cope with these regulations, many
are now considering ditching the delegated
reporting model, in which they outsource the
process to their sell-side counterpart.
“As we look closer at our governance process
and at the quality of data that is required, that
delegated arrangement becomes less satis-
factory. Institutions are open to taking this in-
house as there are more middle-wear solutions
available to meet your reporting obligations,”
said Darryl Cornelius, head of European regula-
tory projects, State Street Global Advisors.