With close to 180 people through the door, the main room was packed and remained so throughout the day. We had panels and speakers addressing issues ranging from sustainability, market structure, financial stability, digital assets as well as the bread-and-butter of asset management regulation. The debate was lively, especially when it comes to some of the US regulatory reforms proposed by the SEC.

Top takeaways:

• Many industry participants described some of the recent proposals around private funds and dealer registration as potentially disruptive or even existential. The cumulative effect of all the new rulemakings is now starting to create concerns about the ability to successfully run active strategies.  
   
• Many are starting to feel exhausted by sustainability-related regulation (especially in the EU) that keeps changing and expanding. International harmonisation is coming but it’s likely to focus more on narrower issues of corporate disclosure, leaving divergence when it comes to fund and product disclosures.  There was a call for a pause so that the industry can properly digest the new rules in a stable manner. Law firms report that managers continue to struggle with the various regulatory categories and labels as the attraction of more ‘ESG-focused assets’ alternates with fears of enforcement around greenwashing. Consensus is emerging that the EU SFDR and taxonomy frameworks may not be achieving their stated objectives of improving investor understanding of ESG products. The UK approach on this matter was receiving decent feedback from some of the largest members.
   
• Financial stability issues will continue to be the top priority, not just for the macro prudential regulators. With each market event requiring central bank support, there are more voices calling for further intervention in the asset management sector. The focus is clearly on liquidity risk management and leverage and how those two elements interplay. With most regulators having largely worked on managing investor liquidity, the UK LDI and energy sector crises have shown the need to examine financing liquidity when it comes to running leveraged strategies. On market structure, Europe (including the UK) are playing catch up when it comes to introducing more transparency and market data provision but the direction of travel appears to be set and positive for our sector.
   
• Crypto is here to stay. While there is significant criticism of some bad actor behaviour in these markets, even doubts about the eventual usefulness of the technology, most regulators and industry participants are striving for the integration of this emerging asset class into the financial services regulatory framework. While industry calls for clarity and guidance that recognises the uniqueness of the technology, the policy making community appears to desire to use the existing tools as much as possible under the slogan ‘same risks, same regulation’.
   
• Finally, there is convergence when it comes to regulators tightening the screws on delegation and outsourcing. With the latest SEC proposals and prior NFA guidance, we’re seeing a debate in the US as regards the definition of ‘core adviser activities’ and the need to ensure their outsourcing is well managed and monitored. EU policy makers continue to support the delegation models while at the same time expressing concerns about the robustness of some of the existing arrangements from a supervisory perspective.