Your guide to 2021 in securities services part three: Regulation
Global Custodian has compiled a series of predictions for 2021 from some of the leading voices in the securities services industry, part three focuses on
regulation.
Sebastien Danloy, global head of asset owners & managers, markets & securities services, HSBC
2021 will be the year when ESG regulations start to take effect, with the Sustainable Finance Disclosure Regulation (SFDR) commencing in the EU, requiring asset managers to categorise and disclose on their funds according to climate and wider environmental criteria. Regulators are also consulting in Hong Kong and Singapore. In 2020 there have been greater inflows into ESG funds so there are clear drivers for integration across custody products, including post-trade periodic reporting and digital and data solutions. We expect our clients’ requirements to become more complex and to support this we’ll need ESG data content to become more consistent a
International Adviser spoke with industry players about their predictions for next year.
ESG
Nic Spicer, UK head of investments at PortfolioMetrix, said: “Regulations are on the way in 2021 that will mean advisers must have meaningful discussions with clients about ‘sustainable investing’.
“The regulations will require advisers to evidence that they have taken clients’ ESG preferences into account when making investment decisions. While the timing of the regulation has not yet been confirmed, we expect it to be sooner rather than later.”
Paul Stanfield, chief executive at Feifa, said: “With regards to financial advice, 2021 will almost certainly see “ESG investing” become mainstream. A combination of new regulations, particularly across Europe but also globally, to a degree, allied to consumer demands, will see this shift happen faster and more extensively than many industry experts previously believed.
Your guide to 2021 in securities services part one: Data
Global Custodian has compiled a series of predictions for 2021 from some of the leading voices in the securities services industry, part one focuses on
data.
Roman Regelman, chief executive officer of asset servicing and head of digital, BNY Mellon
In 2021, we can expect more digitalisation, standardisation and outsourcing. Across all aspects of client servicing, we will see increased automation, with data and digital capabilities coming to the fore. Data, in particular, will emerge as a competitive advantage for asset managers and asset owners, and become an asset class in its own right. To make this happen, data management and accessibility of data will emerge as key capabilities, and expectations for quality service and resilience will continue to increase. And because transforming data into higher alpha and cheaper beta with lower cost and less risk is not easy, open architecture and ecosystems will play a greater role
SUMMARY
This edition of Private Equity Comment looks at the Sustainable Finance Disclosure Regulation, which fund managers will need to comply with beginning 10 March, 2021, an ongoing consultation on European Long Term Investment Funds, and the new regulations in the U.S. which could impact managers targeting ERISA investors.
SUSTAINABLE FINANCE DISCLOSURE REGULATION
The Sustainable Finance Disclosure Regulation will oblige fund managers to make certain disclosures, both on their website and in their fund documents, in relation to ESG and more particularly sustainability risks. The rules cover several different disclosure obligations including how managers and advisers integrate sustainability risks into investment decisions/advice and whether they consider the principal adverse impacts of their investment decisions/advice on sustainability factors. The initial disclosure requirements will come into force on 10 March, 2021. Further detail will be published through “regulatory t
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In this Ropes & Gray podcast, asset management partner Eve
Ellis and ERISA & benefits partner Josh Lichtenstein discuss
the recent DOL rule on ESG investing, and how managers should think
about integrating these new DOL rules alongside similar but
sometimes competing rules that have come out in the EU.
Transcript:
Josh Lichtenstein: Hello, and thank you
for joining us today on this Ropes & Gray podcast. I m Josh
Lichtenstein, an ERISA partner based in our New York office.
Joining me today is Eve Ellis, a partner in the asset management