Northern Trust Analyzes Three Regulatory Changes Facing Fund Managers

LONDON, June 9 /PRNewswire/ -- Northern Trust (Nasdaq: NTRS) says that if investment managers are to navigate the intricacies of pending new European regulations, they cannot look at each regulation in isolation. This, according to Northern Trust's latest white paper Funds regulation: A brighter distribution future? is vital to ensure investment managers are well positioned to take advantage of the potential for increased ease of distribution across Europe.

"Europe's supervisors are looking for ways to get more investors involved in the market and to keep them involved, while providing a framework for improved governance," says Wilson Leech, head of Northern Trust's Global Fund Services business.

"The challenge for the regulators is to ascertain the appropriate level of oversight so that the market becomes more and not less efficient. The challenge for investment managers is to understand the impact the regulations will have on their business and their investor base and the overhead required to support and implement these. Whether managers are based in Europe, the United States or Asia-Pacific, these regulations may impact how they do business so they need to be prepared," he said.

The Undertakings for Collective Investment in Transferable Securities (UCITS) IV Directive, the UK's Retail Distribution Review (RDR) and the European Union's Alternative Investment Fund Managers (AIFM) Directive are three significant regulations impacting the funds industry due to converge in 2012.

"While there are notable challenges involved in UCITS IV and RDR the result should be positive for fund managers in terms of driving distribution.  UCITS IV takes the principle of harmonisation further through the ability to create a master feeder fund, and passport a fund management company (meaning managers will have the opportunity to have one pan-European UCITS management company, rather than one in every jurisdiction), while the RDR will remove the commission structure allowing more funds to invest in the UK marketplace," said Karen Hamilton, head of product development for fund administration at Northern Trust.

"The AIFM Directive is the newest piece of legislation facing the funds industry and is the most controversial. There are still significant areas where the industry is seeking greater clarification so investment managers should not make any sweeping changes until it is clear what the directive will entail," she said.

A full copy of the paper is available on request.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2010, Northern Trust had assets under custody of US$3.7 trillion, and assets under investment management of US$647.3 billion. For 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S.

The Northern Trust Company, London Branch (reg. no. BR001960),  Northern Trust Global Investments Limited (reg. no. 03929218) and Northern Trust Global Services Limited (reg. no. 04795756) are authorised and regulated by the Financial Services Authority.

The material within and any linked material accessed via this communication is directed to eligible counterparties and professional clients only and should not be distributed to or relied upon by retail investors. For Asia Pacific markets, it is directed to institutional investors, expert investors and professional investors only and should not be relied upon by retail investors.

• Northern Trust (Guernsey) Limited, Northern Trust Fiduciary Services (Guernsey) Limited, Northern Trust Fiduciary Company (Guernsey) Limited and Northern Trust International Fund Administration Services (Guernsey) Limited are licensed by the Guernsey Financial Services Commission.
• Northern Trust International Fund Administrators (Jersey) Limited and Northern Trust Fiduciary Services (Jersey) Limited are regulated by the Jersey Financial Services Commission.
• Northern Trust International Fund Administration Services (Ireland) Limited and Northern Trust Fiduciary Services (Ireland) Limited are regulated by the Financial Regulator.
• Northern Trust Global Services Limited has a Netherlands Branch which is authorised and regulated in the Netherlands by De Nederlandsche Bank.
• Northern Trust Global Services Limited has a Luxembourg Branch which is authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF).
• Northern Trust Luxembourg Management Company S.A. is regulated by the Commission de Surveillance du Secteur Financier (CSSF).
• Northern Trust Global Services Limited operates in Abu Dhabi as a Representative Office, Licence number 13/238/2008 which is authorised and regulated by the Central Bank of the United Arab Emirates.
• The Northern Trust Company operates in Canada as The Northern Trust Company, Canada Branch which is an authorized foreign bank branch under the Bank Act (Canada).  Trustee related services in Canada are provided by the wholly owned subsidiary The Northern Trust Company, Canada, an authorized trust company under the Trust & Loans Companies Act (Canada).  Deposits with The Northern Trust Company and its affiliates and subsidiaries are not insured by the Canada Deposit Insurance Corporation.
• The Northern Trust Company operates in Australia as a foreign authorised deposit-taking institution (foreign ADI) and is regulated by the Australian Prudential Regulation Authority.
• The Northern Trust Company of Hong Kong Limited is a securities company regulated by the Securities and Futures Commission.
• The Northern Trust Company has a Singapore Branch which is a foreign wholesale bank regulated by the Monetary Authority of Singapore.
• The Northern Trust Company operates in China as a Representative Office and is regulated by the China Banking Regulatory Commission.
• Northern Trust Global Investments Japan, K.K. is regulated by the Japan Financial Services Agency.
• Northern Trust Global Services Ltd (UK) Sweden Filial is Authorised by the Financial Services Authority and subject to regulation by the Finansinspektionen.

IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. For more information about this notice, see http://www.northerntrust.com/circular230.

SOURCE Northern Trust Corporation

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