US managers grapple with regulation
Asset managers in the US are facing the same challenges as their counterparts in Australia in terms of coping with existing and proposed regulation, according to new research released by Boston-based Cerulli Associates.
According to the US-based research group, US asset managers are being burdened by rising compliance costs that are impacting their profitability as they spend more time, resources and money in meeting their compliance obligations.
The research deals with the manner in which US regulatory bodies, particularly the Securities and Exchange Commission, have been stepping up their efforts to ensure that all investors are treated equally by their financial services providers.
“In the wake of recent corporate fraud, a heightened threat of terrorism, and the market-timing scandals within the mutual fund industry, the list of relevant financial services-related regulatory organisations is growing,” Cerulli said.
In addition, it claimed that over the past several years a number of key pieces of legislation have been implemented that are dramatically affecting asset management firms — Sarbanes-Oxley, the US Patriotic Act and anti-money laundering legislation.
Cerrulli said these laws, combined with the Compliance Programs of Investment Companies and Investment Advisor Act have placed substantial pressure on asset managers.
The research suggests that asset managers have moved to deal with the challenges through stronger compliance departments and by beefing up their staffing in key areas.
AUTHOR
Mike Taylor
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