Managing divergence

There are many external challenges facing the asset management industry, including demands for sustainable finance, volatility in capital markets, technological innovation, and cyber threats. Firms must also navigate further rafts of new rules, increasing regulatory divergence and greater supervisory scrutiny. Firms need to adopt resilient and dynamic business models if they are to be successful.

Regulators around the world are focusing on common themes in a fast-changing world. However, a lack of global standards and national nuances mean that they are implementing detailed rules and guidance in different ways. Increasing regulatory divergence is causing complexity and challenges for cross-border asset managers in terms of how they manage and market their products.

Download the 2023 Evolving Asset Management Regulation report

Managing divergence - Evolving Asset Management Regulation Report 2023

This report on the regulation of the global asset management industry brings together a broad-ranging picture of regulatory priorities, developments and proposals impacting the asset management industry around the world. Drawing on the KPMG Regulatory Horizon tool, we considered over 11,000 publications by regulators from over 30 jurisdictions. With the insights and knowledge of KPMG specialists around the world, we have identified seven common regulatory themes, that impact all types and aspects of asset management businesses, and represent market opportunities.

Managing divergence - Evolving Asset Management Regulation Report 2023

This report on the regulation of the global asset management industry brings together a broad-ranging picture of regulatory priorities, developments and proposals impacting the asset management industry around the world. Drawing on the KPMG Regulatory Horizon tool, we considered over 11,000 publications by regulators from over 30 jurisdictions. With the insights and knowledge of KPMG specialists around the world, we have identified seven common regulatory themes, that impact all types and aspects of asset management businesses, and represent market opportunities.

Executive Summary

This report on the regulation of the global asset management industry brings together a broad-ranging picture of regulatory priorities, developments and proposals impacting the asset management industry around the world. Drawing on the KPMG Regulatory Horizon tool, we considered over 11,000 publications by regulators from over 30 jurisdictions. With the insights and knowledge of KPMG specialists around the world, we have identified seven common regulatory themes, that impact all types and aspects of asset management businesses, and represent market opportunities.

Executive Summary

This report on the regulation of the global asset management industry brings together a broad-ranging picture of regulatory priorities, developments and proposals impacting the asset management industry around the world. Drawing on the KPMG Regulatory Horizon tool, we considered over 11,000 publications by regulators from over 30 jurisdictions. With the insights and knowledge of KPMG specialists around the world, we have identified seven common regulatory themes, that impact all types and aspects of asset management businesses, and represent market opportunities.

Key actions for CEOs:

Deliver sustainable finance: Review the firm's overall strategy, embed sustainability factors into the investment process, ensure names and disclosures correctly reflect product offerings, and prepare to meet expanding disclosure requirements.
Mitigate systemic risk: Review investment risk management arrangements, particularly relating to the liquidity management of open-ended funds, and stress testing. Control the use of leverage and adopt asset valuation best practices, especially for private, real and crypto-assets.
Double-down on resilience: Review the risk management framework and controls in the light of challenges and opportunities. Identify and manage operational and information security-related risks, including third-party oversight arrangements. Maintain adequate financial resources.
Embrace innovation: Explore potential uses of tokenization and artificial intelligence to drive efficiencies and new business, within the guardrails of the evolving regulatory framework.
Protect investors: Align the firm's strategy, culture, and purpose with clients' best interests.
Project good governance: Evaluate the success of the firm's culture, leadership, and governance model, and make changes where needed. Encourage a “speak-up” culture, ensure the composition of boards provides sufficient knowledge, expertise, experience and challenge, adopt a flexible business model, and deter financial crime.
Seize opportunities: Factor opening markets and new and evolving fund vehicles into the business and product strategy.