Adrian Whelan

5 Themes in Global Financial Regulation

Brexit. Fintech. ESG. Culture. ETFs.

Last week, regulatory experts and industry leaders gathered in Dublin for the Mason Hayes & Curran “Opening Doors in Ireland” Investment Funds Regulatory Briefing. Speakers reviewed some recent key developments in the investment funds industry.

BBH Senior Vice President of Regulatory Intelligence Adrian Whelan broke down the top five themes he sees in global asset management regulation.

Brexit. While Brexit continues to play out in the UK, its conclusion will have global implications.   

Fintech. As technology evolves, regulators are playing three roles in its evolution. First, regulators are trying to figure out the best way to protect investors in this changing environment. Second, as regulators make rules around certain technologies, it aids the mass adoption of those products. And third, regulators themselves are using technology to find efficiencies to better monitor the institutions they regulate.

ESG. Environmental, social, and governance (ESG) related investment, also known as sustainable investment or corporate social responsibility, continues to draw interest across the world. With greater transparency to the underlying investments of a fund or holdings of a firm, many are urging rules that would require companies to disclose comparable, decision-useful ESG information. Regulators are now tasked with determining what a standardized ESG reporting framework would look like. 

Culture.Regulators continue to focus on the importance of culture and senior staff accountability within asset management. Most notably, there are increased expectations on board directors and senior managers to set appropriate culture in their firms with the “tone from the top.”

ETFs. As the use of exchange traded funds continues to rise, so does the regulatory scrutiny on these types of funds. Specifically, regulators in the US, Hong Kong, and Dublin have recently put out proposals for new rules to govern ETFs.