MIFID II: RESEARCH UNBUNDLING (Oct 2016)

Reading through the recent consultation papers released by the AMF and the FCA, it is interesting how the two countries are approaching the Investor Protection area in general and specifically in this case; research unbundling.

Any Asset Manager of size will be faced with a different framework/regime depending on which country they are operating in - and of course many operate in more than one country. At this stage they are both consultation papers so the final outcome is not yet set in stone, however the definitions are key. Starter for 10 - What exactly is substantive research? What is of non-material financial benefit? Corporate Access and wider services may be included within the Research budget - or not - depending on the Authority concerned.

These conundrums are in addition to the underlying issue of how to establish an infrastructure that meshes CSAs with RPAs; that recognises the RPAs against the Budget and that recognises the value of received research to reflect back to the end investors. We have been very impressed with one particular firm that is building a new system from the ground up which promises to solve this set of challenges. Watching with interest...