Proposals for Better Management of Non-Financial Risks within the European Fund Management Industry

Proposals for Better Management of Non-Financial Risks within the European Fund Management Industry - December 2012

2. Key Topics on the European Regulatory Agenda

Figure 2: How protected from the following non-financial risks do you feel you are?

Table 1: Priority of topics for new regulation (in percent) The following table shows the percentage of respondents who picked each theme as their nth priority for new regulation. The synthetic index is computed for each theme as the sum over n of (1/ n ) times the percentage of people who chose that theme in the n th place.

Transparency, information & governance

Financial responsibility of the industry

Regulation on restitution

Regulation on distribution

Judicial powers to investors

Choice #1

61

20

11

7

1

Choice #2

16

40

14

21

9

Choice #3

14

19

20

27

19

Choice #4

6

18

29

21

25

Choice #5

3

3

25

24

45

Synthetic index (1/n weights)

75.4

51.6

37.5

36.2

27.6

work (Amenc and Sender, 2010), this is at odds with the priorities revealed by the scheduling of regulatory initiatives and the wording of regulator’s proposals. At this stage, the key pieces of legislation on non-financial risks and restitution are AIFMD and the proposed UCITS V Directive. The fund manager having the central role in the fund management industry, it should be expected to play a key role in the limitation and management of non-financial risks. It

judicial powers to investors seems to come out much lower on the agenda of our respondents although this may reflect that a majority of them would be defendants in judicial procedures initiated by investors. These responses underline the fundamental importance of transparency and affirm the role of the industry as a whole in the management of non-financial risks. Although this is consistent with the central messages presented in our earlier

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An EDHEC-Risk Institute Publication