Navigating the waves of regulatory change: Insights from Aiviq’s asset management roundtable

Navigating the waves of regulatory change: Insights from Aiviq’s asset management roundtable

A pivotal discussion ensued last week as Aiviq gathered industry captains from 12 global asset management firms, encompassing Designated Persons from Irish Management Companies (ManCos), at The Westin, Dublin.

The spotlight was firmly cast upon the dynamically shifting regulatory terrain in distributor oversight, with a particular lens on the evolution of CP86 and CP138 from the Central Bank of Ireland (CBI). These regulatory introductions have precipitated a refreshed emphasis on fund distribution strategy, and Aiviq’s roundtable facilitated a stage for leaders to relay their adaptive strategies.

Unpacking the essence of CP86 and CP138 elucidates their significance in the current regulatory milieu. CP86, colloquially termed the “Dear Chair Letter,” endeavours to amplify the efficacy of Fund Management Companies (FMCs). It strives to empower FMCs to exert substantial control over their delegates’ activities, extending its guidance to self-managed investment companies (SMICs), UCITS management companies, alternative investment fund managers (AIFMs), and AIF management companies incorporated and authorised in Ireland. On the other hand, CP138 delineates responsibilities for all firms in maintaining a central register of all outsourcing and implements a robust risk management framework, KPIs, and Management Information (MI) for oversight and accountability.

Chris Martin, director at Alpha FMC, underscored the paramountcy of data precision and transparency in this newly shaped regulatory domain during the challenges and solutions segment. Several pivotal challenges and solutions were brought to the forefront, including the formulation of documented policies and procedures for onboarding new distributors, integrating new technologies and data sources to augment MI and reporting capabilities, digitalising processes to minimise manual workarounds and communications, and formulating Service Level Agreements (SLAs) with third parties and distributors.

Intriguing insights were shared by keynote speaker Mike Langridge, distribution governance manager at Baillie Gifford. His dialogue centred on establishing repeatable controls to illustrate oversight to regulators. He emphasised the necessity of incorporating various metrics in Distributor Impact Assessments and suggested a distributor tiering approach for oversight, including a “no-go” tier as a pivotal metric for demonstrating regulatory compliance.

Aiviq has been an instrumental player, processing data from over 250 different sources of client Assets Under Management (AUM) & Flow transparency data worldwide, thus providing visibility across the distribution value chain. Furthermore, through their innovative TermsCloud application, Aiviq masters distribution agreements, codifies fee and rebate terms, and facilitates enhanced distributor data governance and net revenue reporting, integrating into onboarding and client service workflows.

In conclusion, Aiviq’s Roundtable on Distributor Oversight has shone a light on the challenges and opportunities proliferating within the industry. As the regulatory landscape continues to evolve, the keystones of collaboration and data transparency will prove pivotal to our shared triumphs in navigating through these regulatory waves.

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