Shedding Light on Non-Financial Risks – a European Survey

Shedding Light on Non-Financial Risks – a European Survey — January 2012

3. The Need for Change in Regulation and Risk Management Practices

The main point of disagreement between country groups regards contractual responsibility sharing. France appears less in favour than average, while the United Kingdom and the Germany, Austria and Netherlands group are more in favour. Interestingly, Luxembourg and Ireland are less in favour when it comes to defining the responsibilities between the asset manager and the depositary, but more in favour when sub-custodians are contracting.

to investors: a significant majority of respondents (62%) agree that restitution of UCITS assets should be made in reasonable delays (18% disagree). Given the complexity of unwinding certain positions at fair prices, “immediateness” does not seem very applicable indeed. Lastly, respondents also require that information on contractual arrangements be disclosed to investors: 66% agree that it should be declared in the Key Information Document.

Figure 3.5.2: Country group average of regulation on restitution How much do you agree with the following assertions regarding regulations on the restitution of assets?

“Fr” is France, “UK” is the United Kingdom, “Ge+Au+Nl” is Germany, Austria and the Netherlands, “Lux+Irl” is Luxembourg and Ireland, and “RoE” is the rest of Europe. Answers are coded in the following manner: -2 for Strongly disagree, -1 for Disagree, 0 for Unsure, 1 for Agree, 2 for Strongly agree.

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An EDHEC-Risk Institute Publication