There has recently been a wave of global regulatory reforms which affect fundraising. These changes are far-reaching and can impact how fund managers structure funds, their proposed investor base, how and where funds are marketed, the remuneration that may be received, registrations that may be required and dealings with investors.
A stocktake of recent global reform: common regulatory themes
The majority of new regulation continues to be a reaction to the global financial crisis.
Financial services regulators world-wide have focussed on the key themes of investor protection, investor suitability, and the mis-selling of complex products. There have been changes to the “retail investor test” in many countries, including in Singapore, Hong Kong and the United States, as well as proposed changes in Australia. There has also been a sharper focus on the quality of financial advice and transparency of remuneration arrangements, for example in Australia with the Future of Financial Advice (FoFA) reforms, in the UK with the Retail Distribution Review and in Europe through the proposed second iteration of the Markets in Financial Instruments Directive (MIFID 2). This follows an initial move in various countries to introduce licensing and/or disclosure regimes for wholesale funds, such as private equity funds, where they did not have them previously – e.g. the European Alternative Investment Fund Managers Directive (AIFMD) and the Investment Advisers licensing regime introduced under the Dodd Frank reforms in the United States.
Read full article, please click here.