2019 FinReg Outlook: The Calm Before the Storm

The great reregulation has often been referred to as a tsunami but, in truth, it can be more accurately characterized as an El Niño. A meteorological phenomenon that happens when surface temperatures off the Pacific Coast of South America rise for a sustained period, an El Niño can last anywhere from 1-5 years. Varying in intensity, an El Niño affects the global climate and disrupts normal weather patterns around the world, causing periods of extreme weather. Last year saw the end of the most recent regulatory El Niño and we enter 2019 in a period of relative regulatory calm. While there are some regulations coming in this year, mercifully there is no equivalent to the Markets in Financial Instruments Directive (MiFID) 2 or the General Data Privacy Regulation (GDPR). This allows asset managers to catch their breath and spend time bedding down the recent wave of regulatory change. Managers should also keep an eye on policymakers, as there are signs that the regulatory temperature will rise again this year. Policymakers have shifted their focus from implementing regulations to assessing potential changes. The industry will see the outcome of that assessment being put into action this year with a number of open issues set to be finalized along with the introduction of new proposals. With regulators on both sides of the Atlantic poised to take action on multiple fronts, it is important that asset managers understand what issues are on the horizon. To help you prepare, here are the key developments, regulations, and trends that we think asset managers should be tracking for the year ahead. 2   Custody and Fund Services The asset management industry is in a period of regulatory calm but there are signs that storm clouds are forming.