Comment: US election promises new regulatory environment

Portia Amato, US Practice Lead at Bovill Newgate, part of the Ocorian group, has commented on the regulatory ramifications of Donald Trump’s victory in this week’s election in the United States:

“The scale of the Republican victory in this week’s election makes it one of the most significant in some time, and will result in some sweeping changes to regulatory and tax requirements.” 

“As with many of President-Elect Trump’s policies, there will be a pronounced distinction between the treatment of domestic and foreign concerns. So while we can anticipate lighter touch scrutiny on domestic regulation of financial services, corporate entities and individuals, that same loosening won’t apply to their foreign counterparts.

“We’ll see a change in the chair of the Securities and Exchange Commission (SEC) as part of the Trump Administration’s hands off focus on regulation.  However, the SEC has functioned under this regime previously and has learned to work smarter with less support. Don’t be fooled into thinking you might therefore stand a lower chance of being examined by the SEC, who showed during President-Elect Trump’s first administration that they can stay focussed and continue to maintain pace in conducting exams.

“The biggest impact of the second Trump administration, from a regulatory point of view, will be on foreign entities, and managers and investors who invest overseas. The government will be pursuing an America-first agenda that wants to keep as much money and investments as possible within US borders; any firm or UHNWI who prefers to invest globally will find that much more difficult.

“We’re already advising our clients who hold interests elsewhere to tighten up their know your client (KYC) and anti-money laundering (AML) checks now, and crucially document those processes. Preparing now will stand them in good stead for any enhanced reporting requirements that come into force under the next administration.  Additionally, we are advising clients to document the rationale for their overseas interest to prepare for the tax scrutiny that they will likely be under the microscope for.

“Legislation takes time to come into force, but it’d be a mistake to not act soon if you believe you might come into scope of new rules. Speak to an expert now to stand the best chance of adapting quickly.”