The regulatory perspective — How is ASIC strengthening the funds management industry?

The Australian funds management industry has seen considerable growth in recent years and the last six months has seen work from many organisations, including ASIC, to ensure the funds management industry will continue to play a vital role in the Australian economy.

In January the Financial Stability Board (FSB) published its Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities. These recommendations will enhance the resilience of asset management activities, underpinning strong, sustainable and balanced economic growth worldwide. The policy recommendations address structural vulnerabilities that could present financial stability risks to the wider economy, with a major focus on operational risk and the challenges faced by asset managers during stressed market conditions.

In response to the FSB recommendations, the International Organization of Securities Commissions, including ASIC, is reviewing its guidance on fund liquidity and risk management, to ensure it remains current and responsive.

In March this year we released Regulatory Guide 259. RG 259 is the culmination of extensive work and liaison in this area. While targeted at responsible entities the guidance may also be useful to the operators of investor portfolio directed service (platforms) and managed discretionary accounts, as well as wholesale fund managers.

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