30 January 2019

ALFI: Growth under pressure in a volatile environment

Regulatory developments

ALFI continues to actively engage with policymakers on key issues such as the ESA review and to provide solutions for asset managers in the context of Brexit.  In 2018, ALFI responded to 15 consultations and issued 15 publications, guidelines, white papers and studies – on topics as varied as EMIR, PRIIPs, GDPR, risk management, AML/CFT and tax – not only to explain the view of the industry but also to help its members with the implementation of legal, regulatory and operational requirements.

Sustainable finance

ALFI has been an early mover in actively promoting responsible investing opportunities for asset managers. Convinced of the opportunities for and the key role of asset management in fostering sustainable finance, ALFI supports the EU Commission’s Action plan on Sustainable Finance and is closely monitoring the first concrete regulatory proposals.

The pan-European personal pension product (PEPP)

ALFI sees the pan-European personal pension product (PEPP) it as an interesting opportunity for asset managers. European households must increasingly assume responsibility for their own financial well-being and long-term savings, including retirement. At the same time, if the European economy is to be strengthened, workers’ mobility must also increase. Fragmentation between national markets and limited portability of personal pension products however make this difficult as present.

International distribution

Camille Thommes, ALFI Director General, states: “One particular highlight in 2018 was ALFI’s 30th anniversary, as we celebrated the work we’ve done over those years to make Luxembourg the domicile of choice for cross-border investment funds. We continue to explore markets around the world and open new opportunities for funds. This year our roadshow plans include the US, Latin America and a number of South East Asian countries.”

ALFI expects UCITS and AIFs to be key beneficiaries of the Capital Markets Union, which aims to increase investment and the choices available to retail and institutional investors in Europe and to migrate some of the vast pool of deposit savings into managed investments. Looking outside of Europe, the global footprint of UCITS will surely serve well in the coming decade as populations in many markets are encouraged by their governments to take on the mantle of pension provision.

FinTech

Financial technology (FinTech) and technology in general have been an important focus for ALFI. The association’s Digital/FinTech Forum aims to raise awareness, identify the challenges and develop the opportunities inherent in new digital technologies for the fund industry. In 2018, this included aspects of digital distribution and “RegTech”. In the year to come, a new cybersecurity working group will develop best practices in this field, aiming at a joint industry understanding of what cybersecurity responsibilities business leaders have. Camille Thommes explains, “ALFI will also continue its regular interaction with FinTech players to monitor and develop RegTech and blockchain tools, which will reduce costs and increase efficiency in the industry, ultimately benefitting investors.”

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