MiFID II Research Unbundling: Find out what’s next
By David Jones
The ipushpull team is heading over to Bloomberg’s London office on 27th January for their MiFID II: Spotlight on Independent Research event. MiFID II (Markets in Financial Instruments Directive) is new European legislation intended to improve the functioning of financial markets after the global financial crisis and to strengthen investor protection. The aspect of MiFID II that interests us most is the financial research unbundling.
Until now, when banks provided research information to institutional investors such as pension funds and asset managers, the cost of that research was included (or bundled) in the trading commissions charged by the banks and brokers they trade with. This practice generated incentives for these investors to trade exclusively with particular institutions, rather than seeking better deals elsewhere or investigating alternative assets to invest in. In the new world, pension funds and asset managers will be responsible for monitoring their use of research, recording how much they are spending on it and reporting this information to both their investors and the regulator.
A MiFID II Primer
MiFID II is a rather dry subject to research but its effects on the financial markets will be far-reaching and many institutions are unprepared. For the most thorough and reliable information, head to the Financial Conduct Authority’s website. This covers all the MiFID II proposals, not just those affecting research providers and consumers, and has guides to what firms will need to do to ensure their business functions will be compliant with the legislation. It’s a lengthy read, so for those interested purely in research unbundling, TABB Forum has published a handy digest of the proposals.
MiFID II Research Unbundling Delays and Uncertainty
This week’s event at Bloomberg focuses on the effects of MiFID II on independent providers of financial research. At ipushpull, we’re helping these publishers (and their subscribers) get ready for the changes with our secure, monitored and access-controlled document distribution platform. It should be a stimulating morning.