Global markets have experienced tremendous growth in the outsourcing of back office functions in recent years. For instance, 80% of hedge fund AUM is handled by a third party service provider, according to PwC. Middle office functions appear to be trending in the same direction with an expected growth rate of 19%. As a consequence, regulators, chartered with ensuring the appropriate oversight framework is in place, have become active commentators creating a common, international theme throughout the asset management industry.
The bigger picture is that it doesn't matter whether regulation has been instituted by the U.S., global counterparts, or not at all. There are no jurisdictional walls when it comes to the damaging effects of net asset value errors and the impact they have on an asset manager and the global investor community. This realization and the global collaboration taking place to address it are creating the new, global standard for "best practice" with or without the existence of domestic or foreign regulatory policy.