Regulation, blockchain and emerging markets are key drivers

Financial regulation, new technologies such as blockchain and the emerging market revival are driving today’s markets, a survey has found.

Regulation was an area that split the 200 respondents into whether it was a help or a hindrance largely dependent on which regulation was highlighted.  Basel III and Solvency II were cited as the most beneficial, according to 62% and 48% respectively.

However, the European Market Infrastructure Regulation (Emir) (2%) and the Foreign Account Tax Compliance Act (Facta) (1%) were considered the most burdensome. The Deutsche Bank survey found that market participants viewed regulatory change as an opportunity to improve settlement, liquidity and collateral management.

Blockchain was overwhelmingly viewed as being the technology that will change the market for securities services with 87% believing that it will radically change the settlement model for securities.

Almost two-thirds (62%) expect the introduction of blockchain technology to produce substantial savings ranging from 11%-25%. Despite being in the early stages of development, 75% see this technology being widely used within the next three to six years.

The emerging markets revival is not viewed as being short-lived by most respondents, with 54% believing emerging markets will deliver growth rates last seen during the 2001-2011 boom. The areas that were seen as most attractive were India and South Asia.

However, 76% viewed that a lack of capital markets infrastructure will deter them from operating or investing in emerging markets.

Those surveyed included institutional investors, banks, financial sponsors, broker-dealers, sovereign institutions, corporate and financial institution issuers and investor relations executives.

©2016 funds europe

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