industry concerns over fund registration

Added 18th October 2012

Concerns over fund registration and minimum investment rules within proposed new regulations from the Emirates Securities and Commodities Authority, mean many within the industry are less than favourable about the new regulations, according to a recent survey.

industry concerns over fund registration

Only 7% of respondents, who included largely those within asset management or fund distribution, said they felt the new rules would be a positive for the funds industry, while a third (33%) said the impact would be negative.

It should also be noted however, that the majority (61%) said they were either “neutral” or “not sure yet” suggesting increased communication from SCA on the aims of its proposals may help sway opinion to more positive territory.

Of the concerns raised by respondents, the fact that fund registration responsibilities will not lie with the asset manager ranked highest, with 80% of those who said improvements could be made to the rules citing this as an area which should be looked at.

There were also concerns about restrictions the rules placed on selling and marketing funds within the UAE, with 71% of those who said the new regulations would have a negative impact citing this reason. An equal number said the new regulations would prevent their clients from purchasing products previously available to them.

Interestingly, respondents did believe the regulations would boost investor confidence in the region, with almost half agreeing this was the case, compared with 23% who said it wouldn’t and 30% who were unsure of the regulation’s impact on investors.

Nigel Sillitoe, chief executive of Insight Discovery which conducted the research, said the respondents’ belief the regulations would have a positive impact on investor confidence is likely to be because the more unscrupulous firms will not be able to sell unlicensed, and therefore less safe, funds in the UAE.

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