Crippling regulatory changes in the US and Europe and further uncertainty surrounding proposed legislative constraints on financials may push a number of asset managers, particularly hedge fund managers, to move to Asia in the medium term. In an interview with Euromoney | Sibos Insider, Eric de Nexon, head of strategy and market infrastructures at Société Générale Securities Services (SGSS) stated that there may be a range of companies fleeing to Asia in search of a less constrained environment.
“While liability rules for depositories are still not set in stone if they changed tomorrow it may push hedge funds and alternative asset managers out of places like London and into Hong Kong or Singapore,” says De Nexon. “While we can’t see these players moving to other emerging market regions Singapore or Hong Kong may be viewed as a more favourable regulatory environment.”
The Alternative Investment Fund Managers Directive (AIFMD) is the first attempt to create a comprehensive framework for the direct regulation and supervision in the alternative fund industry.
As part of the European Commission's response to the financial crisis, as set out in the Communication on Driving European Recovery, it aims to create a comprehensive and effective regulatory and supervisory framework for alternative investment fund managers which includes the managers of hedge funds and private equity funds in the European Union (EU).
The AIFMD is set to be implemented by EU member states by July 2013, however concrete details are still to be confirmed. Meanwhile, the European Securities and Markets Authority (ESMA) released a 436 page consultation paper for market participants to review with all comments to be returned by mid-September this year and finalised details to be printed in November according to authorities.
ESMA has revealed that the AIFMD will be used as a pivotal core for the UCIT V regulations, which will primarily affect long-only fund accounts which make up 80% of all assets in the European funds industry.
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