The Middle East’s fund market is improving, but fund managers should be making changes ahead new UAE asset management regulations, according to new research.

A white paper produced by technology provider Advent Software says fund managers need to prepare for increased transparency requirements when the Emirates Securities and Commodities Authority (ESCA) new fund regulations are submitted later this year.

The regulations are set to request daily NAV publishing, quarterly reports, independent audits, and better due diligence among the UAE’s fund managers.

The original ESCA draft was widely criticised when released earlier this year for its potential to cause fund manager flight from the UAE.

Despite regulatory concerns, the 2011 Middle East Fund Survey revealed a sense of cautious optimism from GCC and Levantine fund industry professionals, with 87% of fund companies predicting net inflow and 60% looking to hire new staff in 2011.

However, a weak and non-transparent regulatory framework was cited as a top-of-mind concern by 40% of investors, 25% of asset managers and 35% of fund distributors questioned.

The survey, conducted by Advent Software and MEED Insight, questioned 111 investors, 25 fund companies and 34 fund distributors. The majority of respondents were GCC based with at least 50 employees.