A strategic guide for fund managers amid evolving global mandates
The regulatory landscape for fund managers is evolving faster than ever. For fund managers, particularly those operating across jurisdictions or stewarding institutional capital, the expectations have shifted from routine regulatory adherence to proactive, tech-enabled oversight.
This change is being shaped by multiple factors: a recalibrated U.S. SEC agenda, rising standards in anti-money laundering and KYC enforcement, and the accelerated adoption of RegTech. Together, these developments are reshaping how funds are structured, operated, and scrutinized.
Here’s what fund managers need to know—and how to respond.
Regulatory Reset: The SEC’s changing stance on shareholder engagement
The U.S. Securities and Exchange Commission is undergoing a philosophical shift that directly impacts asset managers and fund operators. The SEC has introduced policies that notably strengthen corporate board authority while curbing the influence of shareholders—particularly in areas like ESG disclosure and governance activism.
New interpretations of Schedule 13D filing requirements and the narrowing of permissible shareholder resolutions have already led some of the largest asset managers, including BlackRock and Vanguard, to scale back their corporate engagement efforts.
For fund managers with activist positions, ESG mandates, or thematic portfolios, these shifts require a recalibration of proxy strategies and investor stewardship frameworks. What was once a space for soft influence is becoming a compliance risk if not navigated with precision.
AML and KYC: From procedural to programmatic
Across all major jurisdictions, AML and KYC compliance has moved from a documentation exercise to a dynamic, data-driven obligation. Regulators now expect fund managers to demonstrate not only rigorous onboarding protocols but also continuous monitoring, enhanced due diligence (EDD), and credible risk modeling frameworks.
The bar has been raised on several fronts:
- Ultimate Beneficial Ownership (UBO) identification is under greater scrutiny, especially in complex offshore structures or when onboarding clients from high-risk jurisdictions.
- Real-time monitoring of transactions with behavioral patterns being flagged immediately, replacing the old method of periodic checks
- Cross-border consistency in AML programs is now expected, particularly for funds domiciled in regulatory hotspots such as the Cayman Islands, Singapore, Luxembourg, and the U.S.
As regulators increasingly align with FATF recommendations and regional AML directives, fund managers must ensure their internal policies—and those of their service providers—are fully harmonized and audit-ready.
The Rise of RegTech: Compliance at scale
Where traditional compliance systems fall short, RegTech is filling the gap. From onboarding and sanctions screening to behavioral analytics and risk scoring, technology is redefining what’s possible in compliance.
Three trends stand out:
- AI and Machine Learning: Used to detect complex patterns, reduce false positives, and support adaptive risk scoring models. Most leading AML platforms in 2025 embed some level of intelligent automation.
- Blockchain-based KYC: Secure, interoperable ledgers for storing and verifying customer data are gaining traction, particularly for funds servicing institutional investors or dealing with multi-fund structures.
- Cloud-native Compliance Infrastructure: Scalable, centralized, and jurisdiction-aware platforms are now enabling global fund managers to oversee operations in real-time, with far more agility than legacy systems permit.
For fund managers, the implication is clear: RegTech is no longer a ‘nice-to-have’—it’s a critical component of operational efficiency and regulatory resilience.
Strategic takeaways for fund managers
Navigating fund compliance in 2025 requires more than procedural adherence. It requires strategic foresight, cross-functional alignment, and a commitment to continuous evolution. As you assess your compliance posture, consider:
- Are your AML/KYC policies both jurisdictionally compliant and technologically supported?
- Do your service providers (fund admins, custodians, onboarding partners) meet today’s enhanced regulatory expectations?
- Is your ESG engagement strategy aligned with the SEC’s revised stance—and does it account for new disclosure and filing burdens?
- Are you equipped to demonstrate real-time risk monitoring and due diligence depth in the event of a regulatory audit?
Compliance as a competitive advantage
Ultimately, investors, regulators, and counterparties are aligned on one point: compliance excellence is a marker of operational maturity. For fund managers, especially those scaling across markets or managing sophisticated investor bases, this is no longer just a legal obligation—it’s a strategic differentiator.
Being ahead of the curve—on technology, process, and policy—can instill investor confidence, reduce friction with regulators, and unlock operational bandwidth that would otherwise be consumed by manual oversight.
Partner with us for comprehensive, tech-enabled fund administration that ensures your compliance is proactive and resilient.
Start enhancing your fund’s regulatory posture today!