Allianz GI counsel on Dodd-Frank, Fatca and social media

Annette Wargon, global general counsel for Allianz Global Investors and RCM, considers the rising challenges of regulations such Dodd-Frank and the Foreign Account Tax Compliance Act.
Allianz GI counsel on Dodd-Frank, Fatca and social media

The incoming Dodd Frank and Foreign Account Tax Compliance Act (Fatca) are not the only things keeping fund house legal and compliance specialists up at night.

Staying on top of the development of social media sales and marketing practices is another, says Annette Wargon, recently named global general counsel at Allianz Global Investors (Allianz GI), based in Hong Kong.

“The development of these practices using social media is moving so rapidly, it’s quite a challenge for compliance professionals to keep up with it all,” notes Wargon. She is also Asia head of legal and compliance and has spent 18 years focused on these areas in the region.

Social media platforms are potentially powerful and cost-efficient methods of delivering brand messages and marketing products, she notes. And post-financial crisis, fund houses around the world are faced with more regulatory scrutiny around their marketing practices. 

“We need to ensure that our marketing materials – no matter how they are communicated – are in line with all appropriate regulations to ensure investors are receiving clear and accurate information,” she adds.

An overarching challenge, particularly for a global firm, is the need to ensure a level of global consistency in terms of compliance policies and procedures, notes Wargon. This has become even more important since regulators are communicating with each other “a lot more than they used to”, both within and across regions such as Asia, Europe and the US.

This is not surprising, given the increasing imposition of rules with cross-border effects. For instance, Dodd-Frank and Fatca are significant for Allianz GI Investors, as they are for alternative asset managers (see also our recent story, 'Hedge funds fear Fatca').

“We’ve got to be concerned with the extra-territorial implications of new US and UK regulations as they apply to our Asia business,” says Wargon, “with Fatca and Dodd Frank being the obvious US ones.”

International rules as they apply cross-border are always tricky, she notes, “especially because we have less warning given that we have no involvement at the consultation stage. These extra-territorial rules sometimes take on a life of their own.”

Since international firms can be subject to a large number of jurisdictions, they must have legal and compliance experts in all the major global centres to ensure full and timely compliance.

“Sometimes we see some similarity between extra-territorial regulations and local rules,” says Wargon. “For example, some of the consumer-protection components of Dodd-Frank are designed to ensure investors receive clear and accurate information and reflect the local rules we are already prepared for.”

As for Fatca, the industry is still working out what the implications are and how we are able to operationally design what we’re required to do, she says. “The biggest challenge is that we have had to work on planning for the impact of these regulations before they are even finalised.”

Wargon took up her current role in January this year, having been promoted from Asia-Pacific general counsel. This came as part of the group’s recent global restructuring, which also saw Asia-Pacific chief operating officer George McKay promoted to global COO.

Erick Holt – the previous global general counsel for Allianz GI, RCM and Pimco – is now general counsel for Allianz Asset Management (Allianz AM), the holding company for the three units. There are now separate counsels for the two separate businesses under Allianz AM: Wargon for AllianzGI/RCM and David Flattum for Pimco.

Allianz GI has taken the view that global senior management executives should be those who are the best individuals for their respective global roles, regardless of their background or location.

As for other global heads, chief executive Elizabeth Corley and chief investment officer Andreas Utermann travel between offices in Frankfurt, London and Munich.

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