The regulation asset managers face in Europe is diverse, but the parts of their business they are most likely to outsource in response are the same: document production andtechnology updating.
“What is remarkable about our regulation survey findings is the consistency of what is being outsourced most for different bits of legislation,” says Angelos Gousios, a senior analyst at Cerulli Associates.
Whether they were asked about the Alternative Investment Fund Managers Directive (AIFMD), the European Market Infrastructure Regulation (Emir) or the Foreign Account Tax Compliance Act (Fatca), respondents chose the same two areas to be outsourced.
This is understandable, says Cerulli, since “fund managers are there to manage funds, not to run servers or decide whether to upgrade to Windows 8”. The research firm added that specialists can produce the large quantities of Key Investor Information Documents (Kiids) needed by the industry at lower cost than in-house teams.
Comparatively few managers say the regulations in the survey will prompt them to outsource marketing support or compliance functions.
However, Solvency II bucked the “technology and documents” trend. Fund managers say they would be most likely to outsource reporting procedures in response to this legislation, which places capital solvency requirements on insurance companies and requires fund managers to send insurer clients huge volumes of data.
The other two pieces of regulation in the survey were the second version of the Markets in Financial Instruments Directive (Mifid II) and the Packaged Retail Investment Products (Prips) regulations.
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