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Having been at the forefront of the New Zealand experience we have a keen sense of what level of pragmatism and preparedness is required even to hit a good MVP outcome.
The feedback is not overly promising.
Two key themes emerged – even though group 1 is reporting and group 2 is scheduled to begin from 1 July this year, the level of preparedness seems low.
Secondly and closely related is the reliance on incumbent/generalist audit partners to provide guidance and in some cases solutions to reporting obligations. In our experience both of these conditions lead to outcomes ranging from temporary derailment through to some pretty suboptimal results and conversations with the regulator.
Our concerns were reinforced by local sell side firms, with one suggesting the reliance on audit partners was heading toward a 90% failure rate among funds management participants. It’s a loose metric but still concerning even if only half true.
While we continue to engage with the market through local partners 1886 we’ll continue to stress that an ESG or responsible lending stance is a good starting point but it won’t support the reporting obligations without some material work.
This doesn’t have to be prohibitively expensive as were some outcomes in the New Zealand market where reliance on audit partners resulted in costs a multiple of what they should have been in our view – interestingly a number still used by industry bodies to lament the costs of what some regard as over regulation.
In this case we’d suggest there is no substitute for practical experience and the pragmatism to right size the response. And it also helps if your regulatory response partners have done it before.
If you are captured under the Australian CRFD and are wondering how to meet your obligations, we’d be delighted to have a chat. And if it’s not us, then please talk to someone who knows as this is not a good fire brigade action action after the event – we know, we’ve done a few.
Having been at the forefront of the New Zealand experience we have a keen sense of what level of pragmatism and preparedness is required even to hit a good MVP outcome.
The feedback is not overly promising.
Two key themes emerged – even though group 1 is reporting and group 2 is scheduled to begin from 1 July this year, the level of preparedness seems low.
Secondly and closely related is the reliance on incumbent/generalist audit partners to provide guidance and in some cases solutions to reporting obligations. In our experience both of these conditions lead to outcomes ranging from temporary derailment through to some pretty suboptimal results and conversations with the regulator.
Our concerns were reinforced by local sell side firms, with one suggesting the reliance on audit partners was heading toward a 90% failure rate among funds management participants. It’s a loose metric but still concerning even if only half true.
While we continue to engage with the market through local partners 1886 we’ll continue to stress that an ESG or responsible lending stance is a good starting point but it won’t support the reporting obligations without some material work.
This doesn’t have to be prohibitively expensive as were some outcomes in the New Zealand market where reliance on audit partners resulted in costs a multiple of what they should have been in our view – interestingly a number still used by industry bodies to lament the costs of what some regard as over regulation.
In this case we’d suggest there is no substitute for practical experience and the pragmatism to right size the response. And it also helps if your regulatory response partners have done it before.
If you are captured under the Australian CRFD and are wondering how to meet your obligations, we’d be delighted to have a chat. And if it’s not us, then please talk to someone who knows as this is not a good fire brigade action action after the event – we know, we’ve done a few.
