Global Custodian Winter 2018 | Page 49

[ T U R N Gary Tenkman, president & managing director, Ultimus Fund Solutions From regulatory closure to new business plans We believe that 2019 will be a year of regulatory closure. Closure, meaning that many open and ongoing actions driven by our governments and regu- la-tors will be finalised; firms and funds will have adopted their updated policies, procedures, and structural changes; and we all move forward in a slightly altered and somewhat more complex world. By the end of 2019, mutual fund modernisation will have fully taken effect for all large AUM fund families (>$1 billion) and required procedures will have been adopted. Formal filings of Form N-PORT will commence for large funds in March, with the remaining fund families completing their filings exactly one year later in 2020. Likewise, large funds will have implemented the newly required liquidity management procedures by December 2019, with smaller funds following suit six months later in mid-2020. We also think 2019 could include clarity from the SEC on a Fiduciary Rule, potentially leading to resolution on one of the industry’s biggest question marks. Lastly, of particular concern to global managers or advisers with European affiliates, will be the final chapter to the Brexit saga. By this time in 2019, we expect to have a far better picture of what an EU without Britain will look like. With these changes behind us and a clearer regulatory landscape ahead, we expect more resources can be put towards new business plans to expand and invest in growth, and we are excited about what opportunity that holds for the industry. O F T H E Y E A R | N E W Y E A R P R E D I C T I O N S ] Henrique Santos, head of securities services, Brazil, Deutsche Bank Regulatory scrutiny around beneficial ownership to increase in Brazil From a regulatory perspective, we should expect an increase in the regulatory scrutiny around beneficial ownership during 2019. In the last couple years, the Brazilian Tax Authority has been increasing its requirements around the identification of the final beneficial owners for non-resident investors, and this is still a trend. From a securities services perspective, Brazil is aiming to change its settlement cycle to T+2 from T+3. The goal is to harmonize the Brazilian market with other markets around the globe and bring more efficiency to all investors. This will also require investors to become more efficient in their processes. We expect more resources can be put towards new business plans to expand and invest in growth. Jonathan Watkins, managing editor, Global Custodian Sub custody M&A I believe that in 2019 we will see a merger between two big mul- ti-market sub-custody players. Consolidation has been rife among fund administrators, stock exchanges and asset managers in recent years, and with regulatory, cost and technological pressures facing custodians, a merger is on the horizon. It’s a tough business to be in with clients demanding more for less and custodians constantly re-assessing their business models to stay competitive. In 2019, the operational cost benefits of such a deal may be too tempting to ignore for two of the market’s players. Despite their inherent cul- tural and business differences, it could even be a central securities depository and a sub-custodian that merge. Winter 2018 globalcustodian.com 49