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

believe that protection and information requirements should be lower or greatly lower towards professional investors, while 53% think it should be the same. As such, respondents seem to suggest that information should be fully available for all investors, but that it is mainly the advice given in the distribution (and the degree of protection of available funds) that should differ. While, across the board, France is in favour of fewer requirements for professionals, distribution is actually the only item where we see a significant discrepancy for the United Kingdom as well as for Luxembourg and Ireland, who are in favour of higher protection and information requirements towards professional investors significantly more than average. And, as we saw, respondents believe that other duties should be quite similar: for the financial responsibility of the industry, 32% of respondents believe protection and information requirements should be lower or greatly lower towards professional investors, while 47% think it should be the same. Obligations of restitution come next, with 60% of respondents believing that protection and information requirements should be the same. On the whole, most respondents believe that obligations of protection towards professional and retail investor should be largely the same, but that it is in the distribution of funds that duties should mainly differ.

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An EDHEC-Risk Institute Publication