more regulation required to attract foreign investors: leading asset managers
A GCC Asset Management Summit organised by MONEYworks Magazines brought to the fore a number of regulatory issues that need to be addressed by regulators for creating a successful asset management industry in the region. Participants from the cream of the industry highlighted a number of issues, including the presence of multiple regulators and the lack of a mechanism to allow portability of products across the borders that hinder growth of the industry.
The MONEYworks GCC Asset Management Summit was held on the 5th of September at the Shangri-La in Dubai. The summit was organised as a point of reference for the GCC, addressing issues like corporate governance and regulations that are key factors affecting the growth of the asset management industry.
One of the major topics of debate was the role of the UAE Central Bank, and speakers like Haissam Arabi, MD, SHUAA Capital, asserted that more regulations were needed to help the asset management industry grow in stature. Lack of solid regulations has had a negative impact on foreign investors’ comfort levels when it comes to domestic market asset management, he added.
The call for more regulation was encouraged by Amjad Ali Khan, Senior Partner, Afridi&Angell Legal Consultants, who said: "In fact the current regulatory structure in the UAE overseeing the onshore management of investments is fairly dangerous. There are no laws with regard to ownership on a beneficial or a legal basis, and there is no formal structure of the trust. The UAE Central Bank is completely aware of this. It recognises it, and it encourages banks to form funds offshore, in Bahrain."
Topics discussed included the exporting of capital from the region and how enhanced regulation and corporate governance can retain capital in the region.
Sandy Shipton, Head of Wealth Management, DIFC, said: "The local investor base (as sophisticated as it is) has always sought to invest their wealth elsewhere, whether [that is due to] legal impediments, whether it is cultural impediments, whether it is professional impediments, the reality is that the wealth has gone elsewhere. And I think part of what we are trying to bring about is a reversal of that."
The area of self regulation was discussed, with Naveed Ahmed, Head of Investments, Dubai Islamic Bank, commenting: “I think the challenge is that when you have so many financial institutions, and now you have a lot of boutique banks and people selling from the DIFC, from here, from there, I just don't think the impetus [to self-regulate] has been there, and really have some sort of borders to say, look, we need to operate and regulate within this.”
Leading organisations supporting the summit included Afridi&Angell, Algebra Capital, Bin Zayed Investments, Deutsche Asset Management, DFSA, DIFC, Dubai Islamic Bank, EIS Asset Management, Franklin Templeton, Heraymila Investments, Invesco, National Bank of Dubai and SHUAA Capital.
The conclusions and outcomes of the Summit will be published in a high level research report with the MONEYworks October issue.
