A US-based mutual funds association has announced the launch of what it says is the first global funds body of its kind to tackle industry issues – yet its arrival comes as news to trade organisations in Asia.
The Investment Company Institute (ICI) yesterday unveiled London-based ICI Global, which will focus on regulatory, market and other factors for global investment funds, managers and investors.
And in an interview with AsianInvestor, Dan Waters, newly appointed managing director of ICI Global, described Asia as an important priority.
But when contacted, the Investment Management Association of Singapore said yesterday that it was the first time it had heard of the new body, while the Hong Kong Investment Funds Association (HKIFA) admitted it had only been made aware of it in the past few days. Hong Kong's Securities and Futures Commission declined to comment on whether it had been consulted.
Sally Wong, chief executive of HKIFA, says: “ICI touched base with me on this over the weekend, and I have a preliminary understanding of the initiative. I look forward to having the opportunities to understand more about this initiative and how Asia will be positioned in the game plan.”
Of course, European and US fund managers account for the bulk of assets under management globally, and those jurisdictions tend to set the global regulatory agenda that others follow.
ICI Global’s policy priorities and purposes fall into four broad categories: the role of funds and fund managers in financial stability; key transnational regulatory developments for funds; global trading and market structure policy developments; and retirement savings and pension systems.
The funds industry has always been a global industry, and that has increasingly become the case in the past decade, particularly in the past few years, says Waters. He also points to rising cross-border penetration of funds around the world.
“Recent international crises have had a major impact on the funds industry,” he adds. “It seems to ICI it would be sensible to find global solutions to some of these issues rather than regional or national ones.”
ICI Global will serve as a conduit for dialogue with a broad range of national and transnational regulators. It will also advocate regulatory policies that promote funds as long-term vehicles.
The not-for-profit organisation adds that a key part of its strategy will be to work in close cooperation with national and regional fund and other associations worldwide.
Several international fund management groups have already expressed plans to join ICI Global, it says, including Capital Research and Management, Federated Investors Funds, Franklin Templeton Investments, Goldman Sachs Asset Management, Invesco, JP Morgan Asset Management, Legg Mason, Nuveen Investments, Pimco Funds, T. Rowe Price and Vanguard.
ICI Global has not yet spoken to Asian fund managers directly, says Waters, although he notes that several of the large international managers involved have a significant Asian footprint. Nor has it yet had much contact with Asian regulators or trade associations.
“We’ve spoken to Efama [the European Fund and Asset Management Association],” he says, “and it’s our intention to speak and work closely with the regulators and trade associations in Asia and around the world.”
"It will be talking increasingly to Asian institutions from here on in,” he adds, “but it’s only day one, so many people are only just learning about our existence.”
As for ICI Global’s choice of location, the board felt it was important to be situated in a global financial capital, says Waters, who has had a long career in regulation, including 12 years at the UK’s Financial Services Authority, where he directed asset-management policy.
He notes that several other global institutions – such as the Financial Stability Board, Bank for International Settlements and Iosco – are based in Europe.
The European time-zone was also a factor. “It’s not just about London and New York,” says Waters. “We’re very interested in reaching out to Asia and South America and other fund centres.”
Waters concedes there could be overlap between ICI Global’s activities and those of regional and national regulators and associations. However, there are a large number of issues that the new body will not be involved with, he says, because they are dealt with perfectly well locally. He cites the debate over changes in Ucits structure rules in Europe as one example.
ICI Global will also have a steering committee – under the leadership of Jamie Broderick, Europe head of JP Morgan Asset Management – that will include senior executives of its global fund members.
There will also be a full-time international team put in place, based in London. It will comprise four professionals and support staff to start with, and hiring is under way.
“We’re looking for people with deep international experience in the funds industry and language skills other than English,” says Waters. That will be on top of the ICI staff based in Washington, DC who have been in place for several years and know the funds community well.
Funding will be via membership based on a formula according to funds under management.