160 high-level European fund management industry professionals were surveyed by EDHEC-Risk as part of the 'Risk and Regulation in the European Fund Management Industry' research chair, sponsored by CACEIS.
Respondents to: ‘Shedding Light on Non-Financial Risks – a European Survey’ stated the main causes of an increase in non-financial risks were growing sophistication of operations, reduced capacity of some intermediaries to guarantee deposits, unclear or inappropriate regulation, and the ‘total absence’ of responsibility of management companies regarding restitution.
CACEIS stated that the main message from this study is that: “the regulatory priorities for the respondents relate to themes to which the regulator has paid less attention in recent work, notably AIFMD.”
On the financial responsibility of the industry in non-financial risks, 79 per cent of those surveyed consider that “fiduciary duties of asset managers should be reinforced, by stating that they must invest for the sole benefit of their clients,” and 67 per cent agree that asset managers should have greater responsibility for non-financial risks.
Faced with the growing complexity of UCITS and the resulting increase in counterparty risks, the idea of secure UCITS funds, where the depositary would be unconditionally responsible (contractually or legally) for the restitution of assets, should be an option to consider, according to 67 per cent of respondents.