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Charles Muller, partner at KPMG in Luxembourg, says: "Managers want a break from regulation. So much of their energy is going into regulatory issues that they have less time to look after their clients."
The list of upcoming regulatory measures European asset managers are faced with is extensive. Various iterations of the Ucits rules are only one part of the flood.
Other parts are MiFID in Europe and assessing the retail distribution review (RDR) in force in the UK. But European managers must also be mindful of provisions of the Dodd Frank Wall Street Reform and Consumer Protection Act, and any implication for their activities of the Volcker Rule provisions, coming out of the US.
Muller acknowledges it can be difficult for managers to know what to focus on among such an "avalanche of regulation". But he says there are certain issues highlighted in the current UCITS V proposals that require particular attention from both managers and investors. One pressing concern is the introduction of new sanctions, and in some cases even penalties leading to the loss of licences. Managers would do well to study these areas in detail, Muller says.
Muller says if the UCITS rules become too onerous, then there is a risk product design could be the loser. "At the moment there is no alternative if you want to sell products to retail investors, but managers may well try to launch something less complicated if the product becomes overregulated."
The review of the UCITS V proposal by the European parliament is expected to be finished by the middle of next year. The rules would then take two years to implement, coming into force by 2015. But Muller cautioned that this is only a preliminary estimate, provided that the parliament does not try to amend or add to the proposal.