RegulationCorporate GovernanceFund managers ‘not prepared’ for EU regulations

Fund managers 'not prepared' for EU regulations

Preparations for EU's Markets in Financial Instruments Directive are not adequate, says PwC expert

Fund managers have been warned that they are not allocating sufficient funds
to deal with pending European Union regulation that will require substantial
investment in internal controls and accounting procedures.

Speaking at the release of the CBI/PwC Financial Services survey for the last
quarter of 2005, Pars Purewal, UK investment management leader at PwC, said fund
managers were not spending enough on the new regulations.

The survey found that overall profitability in the financial services sector
had grown at the fastest rate for a decade over the last three months, climbing
41%, with fund management soaring 75%.

Costs for fund managers also increased, doubling in the last quarter, but
Purewal warned that more of this spend needed to be directed towards
preparations for the Markets in Financial Instruments Directive (Mifid), which
comes into force in November 2007.

‘Not enough money has been set aside for Mifid, which have a significant
affect on back office operations,’ said Purewal. ‘The perception is that the
deadline is a long way away, but there is a lot to do and fund managers have
been a little slow to start.’

The FSA has already contacted advising companies to begin implementing Mifid
shortly. The directive aims to harmonise regulation of fund management and
financial services across Europe.

Companies affected by Mifid will have to enhance compliance arrangements for
personal transactions, improve internal audit and accounting procedures and
bolster business transparency and transaction reporting.

Related Articles

Corporate governance: staying ahead in accountancy

Corporate Governance Corporate governance: staying ahead in accountancy

2m Alia Shoaib, Reporter
One in 20 audit firms quit as market evolves

Audit One in 20 audit firms quit as market evolves

1y Kevin Reed, Writer
Colin: #EURef bankers a problem

Business Regulation Colin: #EURef bankers a problem

1y Taking Stock
Best Practice: Saffery Champness managing partner Rob Elliott

Accounting Firms Best Practice: Saffery Champness managing partner Rob Elliott

1y Calum Fuller, Reporter
Standard Life Investments opposes EY's appointment as Shell auditors at AGM

Accounting Firms Standard Life Investments opposes EY's appointment as Shell auditors at AGM

1y Richard Crump, Writer
PwC and Deloitte chiefs sign Remain letter

Business Regulation PwC and Deloitte chiefs sign Remain letter

1y Kevin Reed, Writer
Leader: Audit competition drives change, not necessarily quality

Accounting Firms Leader: Audit competition drives change, not necessarily quality

1y Kevin Reed, Writer
EU audit reform to open up £10bn market for firms

Accounting Firms EU audit reform to open up £10bn market for firms

1y Richard Crump, Writer