Deglobalisation strains regulation and investment choices, fund executives say
Top fund management executives have voiced concerns that fragmented regulation will hold them back, as asset managers try to balance the demands of a highly interconnected investment industry against retreats from globalisation.
Regulation of the fast-growing sustainable investment sector is an area of concern.
European regulators took a lead on defining standards for so-called environmental, social and governance investing this year, with the Sustainable Finance Disclosure Regulation, which aims to improve transparency and prevent greenwashing. But the UK is consulting on its own version of rules, which could take a different approach to the EU in the aftermath of Brexit.
“It’s great that the [UK] regulators are consulting on this stuff, but it is our fear that we’ll have a separate set of rules,” Patrick Thomson, chief executive for Europe at JPMorgan Asset Management, told the Financial Times Future of Asset Management event on Wednesday. “My big concern is around the federalisation or fragmentation of regulation. Adding complexity to fit a local narrative might not be the best outcome for customers,” he added.
Diverging paths between the UK and its larger neighbour create stresses for fund managers aiming to deliver global strategies to clients. “If there are nuances and differences in regulations across each European market, that makes it very difficult to have a common product across those markets,” said Jeremy Taylor, chief executive of Lazard Asset Management...
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