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September 4, 2014 -

What keeps asset owners and managers awake at night?

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BNP Paribas Securities Services Report finds it is regulation and risk.

Meeting regulatory requirements is the top issue that keeps Australian asset owners and managers awake at night.

The finding was revealed in the latest Asset Administration & Custody Review by BNP Paribas Securities Services in Australia. It was undertaken to gauge the industry’s outlook to the changing market, including shifts in investors’ appetite, growth in cross-border funds, regulatory changes and increasing complexity.

“The Review found the top issue that keeps those in the industry awake of an evening is government regulation,” said Peter Baker, Managing Director of BNP Paribas Securities Services in Australia and New Zealand. “Two thirds (67%) are losing sleep over it.”

“Almost nine in ten respondents (87%) also report increased costs due to meeting those regulations, costs which can’t easily be passed on to end investors. A further 8% are uncertain of the impact regulation had on their cost base.”

Interestingly, two out of five report that external custodians and administrators helped them overcome this challenge and reduce costs.

“The most concerning operational issue is risk management – improving risk analytics and improving the risk-return profile of their portfolios – which worries over two-thirds of respondents.  More than half (53%) want a better understanding of their investment risk, with two out of five (42%) not satisfied with their risk reporting, ” said Mr Baker.

Several respondents reported they are now concerned about more issues than ever before.

Click here to read the review

Asset Administration and Custody Review