The majority of asset managers in Asia currently believe it is better to avoid first mover status when it comes to tackling multiple new regulations and the potential opportunities they represent, according to an RBC-sponsored poll of industry participants at this year’s FundForum Asia.
Sixty-five per cent of respondents believed that, given the large number of possible initiatives, the complexity of dealing with several supervisory bodies and often competing initiatives and the possibility of rapidly changing criteria, it is more prudent to potentially mitigate risk by seeing how the first movers fare, and then learn from their experiences.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Just 29 per cent of those polled thought leading out of the gate was the right move.
Regulatory Caution over First Movers
The hesitancy around entering into regulatory-linked initiatives may well be due to the fact that the vast majority of actors in the industry (83 per cent of those polled) see an increase of the regulatory agenda in Asia over the next five years.
Only 12 per cent believe it will stay the same, with Asian asset managers set to feel the effects of more North American and European regulation in the region, as well as local initiatives.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData"This poll suggests that against a backdrop of regulatory change and reform there is an underlying conservatism among asset managers in Asia, combined with an appreciation of the importance of prioritisation," said Andrew Gordon, Managing Director, Asia, RBC Investor & Treasury Services.
"Asset managers need to determine where the level of client demand, credible investment solutions and the everchanging regulatory environment intersect to find the sweet spot for product development and distribution."
Vying for Asian Passport Control
When it comes to the different passporting initiatives in Asia, over 70 per cent of those polled believed Hong Kong- China Mutual Fund Recognition will be the most successful in five years’ time.
This compared to 16 per cent for the ASEAN Passport and 13 per cent for the APEC Regional Passport. The results reflect enthusiasm at the potential of the Chinese market, notwithstanding that the rules have yet to be published.
Respondents were bullish on attracting additional markets into the Asian passporting schemes. Over 78 per cent believe the number of countries participating in one of the three current schemes will increase from the current eight.
"Ultimately, however, the success of any passporting initiative will lie not in the number of markets it includes but the assets that it is able to attract, and retain," said Andrew Gordon. "A successful passporting scheme will need to have a significant advantage in terms of ease of access, cost, automation and technology, in order to be an efficient platform able to distribute products to investors across countries."
With over 1,000 employees across Asia, RBC Investor & Treasury Services provides asset and treasury servicing capabilities for institutional investors, including financial institutions, asset managers, pension funds, sovereign wealth funds and insurance companies.
