A lax attitude toward enforcement under the Trump administration has asset managers more focused on reputational risks than on compliance concerns, according to a survey of executives at hedge funds and private equity funds. The survey of 200 executives by financial services technology firm Koger Inc. found 56% said regulatory enforcement has decreased since Donald Trump became U.S. president; 85% said the U.S. regulatory climate is more relaxed than the international one.

More than three-quarters of respondents said the reduced regulatory concern meant compliance issues are not as significant as they were in the past; 52% said they are more focused on reputational risk the last six months than regulatory risk. Most don’t think the relaxed attitude will last, as 73% said they expect a new administration to strengthen enforcement in the future. “Today’s environment has led in the short term to somewhat less of a worry about compliance vs. reputational risk, though that scenario could change,” said Ras Sipko, Koger’s chief operating officer, in a statement.

Enactment in January of the Markets in Financial Instruments Directive II, or MiFID II, regulatory reforms, and the looming May 25 date for enactment of the General Data Protection Regulation put the European Union into the forefront of regulatory enforcement, as the U.S. steps back, according to a report by Thomson Reuters. Another trend: As U.S. regulators spend more time analyzing data to identify potential problems or deficiencies, financial advisers should be prepared to submit more data in their filings, said the report. “SEC officials also suggest that firms perform data integrity checks before handing over data, that they keep the data in the original format, involve the IT department when possible, offer examiners real-world time frames for document production and produce sample reports early instead of holding all the information until a complete report can be presented,” stated the Thomson Reuters report.
Press Release: Cision
For help with your market research and opinion survey needs, contact Wakefield Research today.