Asia has toughened its regulation of asset management and will no longer be seen as a “light-touch” region, a report warned.
Business consultancy KPMG said that evolving regulation across the region, particularly with reference to consumer protection and fair dealing, was just as tough as in Europe and the US.
KPMG's report - entitled Evolving investment management regulation: A clear path ahead? - said that the diversity of the Asia Pacific region and its rulemaking processes, alongside demographic change and rapid growth, created challenges for pan-regional market participants.
There is a broad focus on investor protection, improved transparency and best practice with reviews of existing regimes already underway. These include the Financial Advisory Industry Review in Singapore, the Future of Financial Advice in Australia and additional disclosure requirements in Japan.
Tom Brown, European head of investment management at KPMG, said: “Asia, along with Latin America, is unquestionably the hotspot for growth; however asset managers would be unwise to expect lighter touch regulation in the region".
He added: "The fast pace of change in product distribution, disclosure and investor protection that we have witnessed in Europe and the US has transferred across to Asia with enhancements to investor protection and product disclosure a definite priority for a number of regulators across the region.”
KPMG’s report identified key challenges such as increased reporting and accountability to improve transparency; consumer conduct looking to increase investor protection and industry trust; and additional risk management requirements.
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