Most asset managers in Asia think there is no first mover advantage when it comes to tackling multiple new regulations and the potential opportunities they represent.

Some 65% of respondents to an RBC poll of industry participants at FundForum Asia said that, it is more prudent to potentially mitigate risk by seeing how first movers fare, and then learn from their experiences.

“This poll suggests that against a backdrop of regulatory change and reform there is an underlying conservatism among asset managers in Asia, combined with an appreciation of the importance of prioritisation,” said Andrew Gordon, Managing Director, Asia, RBC Investor & Treasury Services.

“Asset managers need to determine where the level of client demand, credible investment solutions and the ever-changing regulatory environment intersect to find the sweet spot for product development and distribution.”

Respondents cited the large number of possible initiatives, the complexity of dealing with several supervisory bodies and often competing initiatives and the possibility of rapidly changing criteria, as reasons for their view. 

Almost a third (29%) however, were more than happy to take on the challenge and said being first off the mark was the right move for long-term success.

Hesitancy about entering into regulatory-linked initiatives could be a results of concern over the acceleration of the regulatory agenda in Asia over the next five years, which 83% of polled industry participants expect. Only 12% believe the regulatory agenda will stay the same. 

Asian asset managers are beginning to feel the effects of more North American and European regulation in the region, as well as local initiatives.

Regarding the different passporting initiatives in Asia, over 70% of those polled believed Hong Kong- China Mutual Fund Recognition will be the most successful in five years’ time. A meagre 16% and 13% punted for the Asean Passport and Apec Regional Passport, respectively. 

These results reflect enormous enthusiasm at the potential of the Chinese market, despite the fact that the rules have yet to be published. 

Respondents were correspondingly bullish about attracting additional markets into the schemes, with over 78% expecting that the eight countries participating in one of the three current schemes would be joined by more.

“Ultimately, however, the success of any passporting initiative will lie not in the number of markets it includes but the assets that it is able to attract, and retain,” said Andrew Gordon.

“A successful passporting scheme will need to have a significant advantage in terms of ease of access, cost, automation and technology, in order to be an efficient platform able to distribute products to investors across countries.”