regulators, notably the European Securities and Markets
Authority (Esma), have been calling for input from market
participants on new regulations, president of the European Fund
and Asset Managers Association (Efama), Christian Dargnat, is
pessimistic about how much influence the asset management
industry really commands.
has allowed two months for replies from the industry to its
820-page consultation paper on Markets in Financial Instruments
Directive (Mifid) II, giving a deadline of August 1.
would like to know how all the feedback from corporates and
associations can be analysed in such a way that at least some
industry ideas can be taken into consideration," said Dargnat,
speaking to Global Investor/ISF.
are very willing to consult us to discuss the new reforms and a
huge amount of work is done, but the perception we have is that
Esma broadly knows what it wants to implement from the
beginning. Whatever the [results of the] consultation, it will
follow its own ideas."
suggested that excessive regulation along with competition from
alternative investment product providers pose the biggest
threat to the asset management industry.
problem is that it seems asset managers are being punished," he
said. "We are asking to have a break from the introduction of
even more regulations for some time so we can conduct an
simply don’t know yet if the regulations
implemented so far have created better protection for investors
or better client services."
conceded that some regulatory reforms had been necessary but
was resolutely against further regulation, including the
implementation of a financial transaction tax (FTT), presently
in discussion by 11 European states, which he said was the
single largest regulatory threat to the industry.
keen to stress that he did not deny the legitimacy of the FTT,
he described the consequences of its potential implementation
as being "completely devastating" for the financial
this tax were to be implemented in the way that it has so far
been proposed, it will have so many unintended consequences. It
will have a huge impact on the competitiveness of the market
and ultimately it will negatively impact the end
to Italy’s experience when it implemented the tax
on high-speed trades and derivatives in September 2013, he
suggested that there would be a major loss of market in a
tax was collected in Italy anyway, because firms left the
country and there were no trades. It’s shooting
oneself in the foot."
will be forced into fulfilling functions such as hedging risk
outside of Europe or they will stop altogether as it will be
too costly to do within Europe. Jobs will disappear
is also concern from Efama’s members that
regulation is creating an uneven playing field between
competing investment products provided by banks or insurance
is essential from an investor protection perspective to ensure
that similar, competing retail investment products are subject
to the same requirements."
the challenges with new regulation, Dargnat had a positive
outlook for the European asset management industry over the
next five years.