It is common that regulation is placed on entities domiciled in and under the control of their local regulator. Rarely in financial regulation have organizations outside of a jurisdiction been forced to comply with new rules implemented across borders. However, index administrators, and by extension asset managers, need to comply with new regulation from the European Union – regardless of where they are located.
In this piece for Ignites Asia, I explained why Asian asset managers and index administrators need to pay attention to rules established by politicians and regulators in Brussels.
An excerpt of my article is shown below. For the full piece, please visit Ignites Asia. Please note, the article is behind a paywall.
What BMR Means for Asian Asset Managers
Any index administrator with any index used in the E.U. must have a local regulator in the region, regardless if one or one million indexes are being used. Not only is the administrator regulated, but each index will have to be individually approved for use in the E.U. Every financial institution using a benchmark or basing a product off a benchmark in the E.U. must make sure their index provider has received authorization for that index.