State Street Vision Report Examines the Impact of Regulatory Change Within Europe’s Investment Management Industry
May 04 2011 - 9:00AM
Business Wire
State Street Corporation (NYSE:STT), one of the world’s leading
providers of financial services to institutional investors, today
released the latest of its Vision Focus reports which identifies
trends within the European investment management sector. Entitled,
“The Changing Shape of European Investment Management,” the report
examines the wave of new regulation worldwide and its impact on
business practices and operating models.
According to the report, regulatory efforts have shifted from
enhancing market efficiency to matters of investor protection,
reflecting market-wide calls for improved transparency and investor
security. The asset management industry is in an evolutionary phase
as a result of increasing regulation. With the implementation of
initiatives such as the MiFID II Review, UCITS V, the European
Commission’s review of package retail investment products (PRIPs)
and the review of the Investor Compensation Scheme Directive
(ICSD), the regulatory goals are clear but the long-term impact in
terms of competitiveness, operational efficiency and investment
performance are still uncertain.
Marty Dobbins, managing director of State Street in Luxembourg
commented, “The challenge for asset managers of all sizes will be
to stay focused on their core business of building successful
investment portfolios. It will be easy to be distracted from this
given the volume of emerging regulation. We are working closely
with clients to guide and assist through the significant regulatory
and investor-driven change that confronts them.
“Asset managers are looking for servicing solutions that are
consistent across Europe and that can successfully navigate the
regulatory complexity at both a regional and local market level.
Unfortunately amid this wealth of emerging regulation, there will
be winners and losers, and their identity will determine the future
shape of the European investment management industry,” Dobbins
concluded.
The paper also explores how regulation is likely to have a major
impact on future product development. Mike Karpik, senior managing
director and head of Investments for State Street Global Advisors
in Europe, the Middle East and Africa, commented, “Product
development teams will need to collaborate closely with their risk
and compliance counterparts to ensure that new products are
compliant, workable and fit for market. The marketing of
alternative-style strategies under the UCITS brand, a trend which
could be accelerated by the AIFMD, is serving to bring hedge
fund-like vehicles to a greater audience, although this will not be
without greater regulatory scrutiny and a requirement for more
investor education. Asset managers will need to be highly cognisant
of the type of investor they target.”
State Street’s Vision Series addresses key trends and
developments impacting the financial services industry. Previous
reports have focused on technology innovation, pensions, UCITS IV,
exchange-traded funds and sovereign wealth funds. To download a
copy of this Vision Focus report or others in State Street’s Vision
series of in-depth reports, please visit
www.statestreet.com/vision.
About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's
leading providers of financial services to institutional investors,
including investment servicing, investment management and
investment research and trading. With $22.6 trillion in assets
under custody and administration and $2.1 trillion* in assets under
management at March 31, 2011, State Street operates in 26 countries
and more than 100 geographic markets worldwide. For more
information, visit State Street’s website at
www.statestreet.com.
*This AUM includes the assets of the SPDR Gold Trust
(approximately $56 billion as of March 31, 2011), for which State
Street Global Markets, LLC, an affiliate of State Street Global
Advisors serves as the marketing agent.
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