KEYWORDS: Japan, asset managers, Hedge Fund Regulation, regulatory requirements, outsourcing, back-office, middle-office, hedge fund infrastructure, infrastructure, service providers, Financial Instruments and Exchange Act, Act on Investment Trusts and Investment Corporations, Australia, Australian Prudential Regulation Authority, UCITS, FSA, United Kingdom, market participants, Asia Pacific
Richard Fogarty, Akiko Terada
Japanese asset managers are becoming increasingly receptive to outsourcing investment servicing functions to help them stay competitive in the face of continuing economic challenges. While regulatory and cultural factors have typically discouraged wide-scale adoption of outsourcing, the environment is changing. By outsourcing back- and middle-office functions Japan’s asset managers can seek to reduce long-term investment in infrastructure and stay sufficiently agile to react to future opportunities. Outsourcing also provides the tangible benefit of allowing asset managers to focus on their core competency of investment.