2023-03-29-德勤-2023年投资管理监管展望_20页_4mb

2023 Investment Management Regulatory Overview Summary

Key Themes and Summary

Introduction

The investment management industry faces extensive regulatory changes in 2023, driven by high volumes of rule proposals and enforcement actions. Key themes include regulatory churn, transformative proposals, overlapping requirements, reinvigorated enforcement, and emerging topics. Firms must prepare strategically to manage compliance amid uncertainty.

Regulatory Churn

The SEC proposed over 30 rule amendments in 2022, under its leadership, creating uncertainty and risk for firms. Most proposals stem from addressing emerging technology, outdated rules, and progressive topics, led by figures like Chair Gensler. Legal challenges and overlapping implementation timelines could delay finalization and compliance.

Transformative Proposals

Several transformative regulations aim to reshape industry practices:

• Swing Pricing: Proposed for money market and open-end funds, reducing shareholder dilution and preventing runs during stress; operational complexities expected within short compliance periods.
• ESG Disclosures: New rules require differentiation among integration, ESG-focused, and impact funds, with tailored disclosure requirements; potentially record-challenged.
• Cybersecurity Enhancements: Amended rules under strength-of-market trading and fund names strengthen risk management, requiring policies, incident reporting, and third-party service coordination; based on SEC's 2020 observations.
• Other reforms include private fund fee regulations and dealer scope expansions.

Overlapping Regulatory Requirements

Firms face multiple rules addressing similar areas, such as ESG, cybersecurity, and fund structures. Overlapping can strain resources, requiring coordinated implementation and gap assessments in technology and compliance.

Reinvigorated Enforcement

The SEC increased enforcement activities, including record fines for non-compliance with electronic communications and record-keeping rules. Key areas targeted are Section 15(c) and Section 36(b) violations, investment adviser marketing rules, and electronic communication supervision to support investigations.

Regulatory Horizon and Future Topics

Amid ongoing changes, topics like outsourcing, digital engagement overhauls, and custody practices are expected in 2023. These aim to transform service delivery but add further planning burdens.

Overall Implications

The regulatory volume demands proactive strategies for compliance, with firms urged to conduct gap analyses, evaluate short compliance timelines, and align operations despite uncertainty. Uncertainty from legal challenges casts an air of unpredictability, potentially affecting capital flows. Strategic investments in governance and technology are critical for navigating these changes.