Eames Consulting co-hosts regulatory leadership roundtable with Macquarie

I was delighted to co-host a private markets-focused roundtable for compliance leaders on Wednesday 11th February, held at the office of Macquarie Asset Management. We were joined by compliance leaders from across the industry to discuss all things regulatory leadership in private markets, including current regulatory themes and focus, marketing and distribution, and information barriers and Material Non-Public Information (MNPI). Here are the main high-level takeaways from the discussion, which was held under Chatham House Rule.

Where’s the current regulatory focus?

Conflicts of interest

There’s an ever-present trade-off between the ‘perfection’ required by regulatory frameworks and the slightly more ambiguous reality of day-to-day business, which frequently presents conflicts of interest. As such, what do regulators expect and what can firms realistically demonstrate?

Changes to AIFMD II

Significant updates to AIFMD II will include stricter regulations for loan-originating funds, enhanced delegation oversight to prevent ‘letter-box’ entities, mandatory liquidity management tools for open-ended funds, and expanded investor disclosures regarding fees and delegation. It will be interesting to see how organisations manage the implementation of these changes into their business.

Increased regulatory focus in private markets

With the financial conduct authority (FCA) aware that private markets are a hub of activity at the moment, the general consensus is that there will be a lot more regulatory focus on this area going forward. Many more products are currently being launched onto the market, with large global organisations offering products to retail customers which weren’t readily available to them before. This means the FCA is now much more interested in what’s going on.

Compliance leaders are aware that given the nuances around Consumer Duty and what needs to be evidenced, there will be a focus from compliance on distributors.

Marketing and distribution an area of increased focus

There are a whole raft of marketing challenges when it comes to cross-border distribution and in particular, managing divergent regulatory regimes for organisations with Lux Funds, Irish Funds, American Funds, French Funds and other major fund domiciles and structures. As a result, there’s an increased focus on marketing materials being distributed and speed to market.

Information barriers: where private meets public

Where firms manage both private and public offerings, they need to leverage integrated structures to share insights across asset classes, manage liquidity and optimise investor returns. The discussion covered: the information barriers they encounter operating public and private strategies; managing MNPI across investment, risk and distribution teams; internal pushback on information barriers and how firms are responding; private-only models versus mixed-house approaches; and conflict clearing processes between teams.

Join us at our next roundtable

These events provide a fantastic forum for exchanging knowledge and advice on navigating today’s regulatory challenges. For us, they are also an excellent way to build long-lasting client relationships and understand the specific challenges they face every day.

A big thank you to Macquarie for running the event and to everyone who joined us for the discussion. If you’d like to find out more about our roundtables, are a compliance leader looking for your next opportunity or an organisation looking to bring in a senior compliance professional, please get in touch with me.