Speaking at a Hedge Funds Association Australia regulatory update in Sydney yesterday, Mr Sheeran said that by 2020 asset managers will be required to demonstrate full transparency.
“Whether it’s at the fee level, the portfolio level or the product level – there will be nowhere to hide,” said Mr Sheeran.
APRA’s portfolio holding disclosure rules may have been delayed for 12 months, but according to Mr Sheeran, it’s a question of ‘when’, not ‘if’.
“And [in 2020] it will be much increased from where we see it today,” he said.
“I think we’ll be at a point where regulators will be plugged into asset management portfolios on a real-time basis,” said Mr Sheeran.
Regulators won’t be doing historical reporting in five years’ time, he said.
“They’ll be looking at it as it’s happening, as you’re trading, as you’re taking positions, and they’ll be analysing it in real-time using big data,” said Mr Sheeran.
Pointing to a recent PwC global survey of global asset manager chief executives titled Asset Management 2020: A Brave New World, Mr Sheeran highlighted the sheer volume and weight of financial services regulation.
“We’re seeing it already, and we can see that it’s only going to increase,” he said.
“Post-GFC the regulators might see that the banking system is under control somewhat, and the natural next step is for them to move into asset management,” said Mr Sheeran.
“[They will] look into the asset management space and see what regulations they think are in the interests of the public and investors,” he said.
