Anecdotal evidence has it that attendance at Fund Forum in Monaco this week is significantly lower than in previous years. Some say numbers have halved. Last time I came, two years ago, it was certainly much busier. But what is lacking in quantity is made up for in quality, apparently – the CEOs are here in force.
So are the service providers. I shared a cab from the airport with a woman from SimCorp, have met today with BNY Mellon and JPMorgan, and turned down meetings with Liquidnet, Clearstream and Swift ( I prefer to focus on fund managers at a fund management conference).
There are plenty of issues to occupy the service providers. One that came up at a session today was the question of depositary bank responsibility. The European Commission has raised the possibility of making depositaries stand as guarantors for fund assets, making restitution to investors if money goes astray. This is in response to the issues raised by the Madoff affair, which in Europe focused on a few Ucits funds that invested with Madoff and awarded the sub custody of assets to Madoff as well, so the money disappeared.
One view I have heard is that there is no point even discussing the outcome of such a move as it won’t happen: the regulators are not crazy enough to expect anyone to stay in the business if they have to provide a blank cheque.
Perhaps they are right. But listening to the debate at the session I attended, it seems there is no clear view in the industry of what needs to be done to clear up the grey area in the Ucits rules the Madoff area highlighted. Is it an issue just for Luxembourg and Dublin or a wider one for Ucits?
Threatening to make major changes to the responsibilities of depositary banks has at least started a debate on the issue.