KPMG: Global Investment Management Industry Faces Challenges

By Rob Starr, Content Manager, Big4.com

Investment managers continue to face daunting challenges brought on by a changing global regulatory environment, which is fraught with unanswered questions and an array of differing rules in each region. This from the fourth annual analysis of global financial regulations from KPMG, the audit, tax and advisory firm.

The exhaustive 54-page report, titled “Evolving Investment Management Regulation: A clear path ahead?” examines the regulatory push in the investment management industry in the U.S., Europe, the Middle East, Africa and Asia, and involves an alphabet soup of government agencies and organizations. It says the “avalanche” of regulations is the result of two common objectives being pursued globally—protecting consumers and preventing another global financial crisis similar to 2008.

Regulators in the U.S. will keep a diligent and close watch as expanded registration, reporting and disclosure requirements continue to be implemented. Investment managers representing private funds, money market funds and new instruments will continue to be scrutinized with increased frequency and intensity of examinations.Offshore firms have their own set of challenges.  Regulations from Europe and the U.S. will have notable implications for offshore centers.

John Schneider, head of KPMG’s Investment Management Regulatory practice in the U.S. and a co-author of the report comments:

“We are beginning to see progress toward more consistency with regard to global regulations but there still remains disparity in the regulatory requirements across the regions,” he said.“The goal is to reach a global connectiveness and consistency as to how regulations unfold, which is critical if we are to make sure the competitive landscape is not significantly altered,”