Drivers of asset management regulation: Evolving asset management regulation 2026 report

Drivers of regulation are increasingly converging around the world, from efforts to deliver growth and attract asset managers to modernizing rules, managing financial stability risks, supporting innovation and boosting retail investment.

In this year's edition of KPMG International's Evolving Asset Management Regulation report, KPMG professionals explore the drivers shaping asset management regulation to uncover opportunities and risks for asset managers.

As regulators press ahead with their growth agendas at different speeds, international divergence is increasing, prompting many asset managers to revisit how requirements have been implemented and whether their approach can be simplified.

While regulators continue to be highly active, the focus has increasingly shifted from creating entirely new frameworks to refining existing rules, with an emphasis on supporting growth, competitiveness, and effective market functioning. However, approaches vary significantly across jurisdictions, creating growing divergence that will continue to challenge firms operating across borders.

David Neuenhaus

Global Sector Head of Private Capital and Asset Management

KPMG International

Key highlights

Simplification drives reform, but complexity persists

Financial stability focus sharpens on private credit and AI

Innovation reshapes the regulatory perimeter and product oversight

Retail investment initiatives expand access

Delivering growth and attracting asset managers and their funds

Regulatory efforts continue to support economic growth and competitiveness while also trying to attract overseas managers and their funds.

As assets under management stall in some jurisdictions and competition intensifies, authorities and regulators are going into bat for their industries, with the goal of attracting new funds, increasing investable capital and growing domestic asset management capacity.

Several reforms are also underway to enhance the competitiveness of local fund regimes. Download the full report to see how different jurisdictions are approaching this.

Modernizing and simplifying asset management regulatory frameworks

Partly linked to the growth agenda, many regulators are simplifying aspects of the regulatory regime. While some are going further and faster than others, the general goal is to retain the substance of existing rules while making them work better in practice. This reflects concerns that some requirements had become overly complex or burdensome with limited upsides.

Going against the grain, some jurisdictions are increasing requirements within their asset management regulatory frameworks. Download the full report to see how simplification is playing out across different jurisdictions.

Financial stability

Supervisors and regulators have stepped up monitoring and continue to assess potential risks and vulnerabilities.

While central banks are now more comfortable on topics such as fund liquidity management following post-pandemic policymaking, the next potential hotspots are becoming clearer, with one clear example being private assets and private credit in particular.

AI-related risks are also a growing priority for regulators.

Promoting innovation

Technological developments are creating new opportunities and risks. As an overarching driver, promoting innovation increasingly features in all aspects of regulators' thinking, prompting a rethink of the regulatory perimeter to ensure all relevant activities are captured.

Several regulatory sandboxes have been launched around the world, some of which now specifically feature an AI component.

Innovation also extends to products, with active ETFs and retail private asset vehicles becoming increasingly popular and firms changing the way they engage and interact with customers.

Boosting retail investment

Many jurisdictions are seeking to grow their domestic capital markets, responding to a perceived consumer bias towards saving over investing with substantial efforts to increase retail participation.

Download the full report to see the initiatives being explored around the world.

Opportunities and risks

Potential opportunities
Possible risks for asset managers

Growing the business

In light of the enhancements to regulatory regimes and significant simplification efforts, strategically review the jurisdictions where you are managing funds and assets and assess whether the current set-up best promotes growing assets under management.
Embedding regulation and operating models

As regulators embark on streamlining and simplification, now is an ideal time for asset managers to review how they can reduce operational complexity in the business and align with new requirements in the most efficient way possible.

Lowering standards

Some asset managers may mistake the drive for simplification with lowering standards. Although aspects of the rules are being streamlined, we do not see regulators lowering their expectations.
Regulatory divergence

As regulators realign their policy frameworks, it is inevitable that regulatory fragmentation will continue to increase around the world. Firms need to adopt an efficient approach to regulatory change that ensures compliance across jurisdictions.