Compliance Executives Outline Top Fund Challenges


With the regulatory landscape for asset managers likely to change in the near future under the new administration, compliance and operational executives need to consider the various hurdles they may face when it comes to managing compliance.

From ESG frameworks to increased opportunities across the crypto space and pressure to provide additional diversity, equity and inclusion data, asset managers have their work cut out for them for the second half of 2021.

Below, we have outlined a few areas where investment managers may need to make changes in their compliance programs during the rest of this year:

Drilling down on ESG

  • Expect operational spending to increase as asset managers outline and put into place policies and processes to comply with suggested frameworks, and new regulations.
  • For smaller firms, outsourcing will provide much needed support as they work to adhere to these new requirements.

Tuning into crypto

  • Crypto products are on the rise, as well as interest in those products, but asset managers are still wading through the murky waters of crypto compliance in order to provide guidance for their clients in this new area of the market.
  • Managers with clients interested in the crypto space will need to closely watch the changes from the SEC, invest in knowledgeable personnel, and develop appropriate policies, procedures, and practices related to crypto products.

Incorporating DEI

  • Compliance teams, alongside operations and HR teams, will be challenged to provide due diligence checklists and find suitable processes to manage DEI expectations at the company level.
  • The push for diversity of thought across every level of asset management from investors and businesses will encourage compliance and HR teams to review and address how they report DEI statics and think carefully about being an inclusive partner in the hiring process.

The asset management industry is constantly evolving. The only way to stay above water when it comes to compliance is to stay alert and be aware of changes stemming both from regulators and investor demand. For more information on what Foreside’s compliance executives anticipate will be the top challenges for asset managers in the second half of 2021, check out our full predictions piece here.

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