[ 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.
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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
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