Eugene Grygo, Chief Content Editor, FTF News
The new era of MiFID II/MiFIR has officially begun and it’s not entirely clear if all the financial services firms across the globe that are impacted by the European regulatory reforms actually are in compliance. It looks as if it’s a mixed bag of some firms that are highly compliant while others are getting there.
Given the fluidity of the situation, my guess is that many industry participants need to review the many details, extensions and footnotes of the MiFID II reforms, especially the unbundling requirement of the new regulatory regime.
Toward that end, Alphametry, maker of an investment research platform, has just put out a research unbundling guide, “The Asset Manager’s Regulatory Guide to Research Unbundling.”
This “reference point” for investment managers “encapsulates the Q&As and key discussion points on research unbundling to date from the European Securities and Markets Authority (ESMA), the Autorité des Marchés Financiers (AMF) and the Financial Conduct Authority (FCA),” according to Alphametry.
The paper encompasses how firms define research, the minor non-monetary benefits, budgets, paying for research, and a detailed look at the Research Payment Account (RPA), corporate access, trial periods and the discussion and decisions around receiving and paying for research from non-EU countries, according to Alphametry.
“The journey to research unbundling under MiFID II … has been anything but plain sailing,” says Fabrice Bouland, CEO, Alphametry, in a prepared statement. “The painful process of unbundling research from execution, including price discovery and budgeting, has created a significant challenge for asset managers and it remains to be seen how planning for MiFID II will play out in the weeks and months ahead. Our guide provides managers with a straightforward reference point and we are delighted to share it with firms and asset managers.”
The “separation of research and execution fees, is just the tip of the iceberg,” Bouland adds. “Competition and innovation are forcing firms’ investment processes to evolve dramatically. Highly diverse sources of research must be quickly and systematically turned into actionable knowledge in order to generate performance. What’s often missing from the dialogue on research unbundling is the opportunity it is creating for firms — that of technology deployments which will significantly boost the performance of their research as well as meeting their compliance obligations.”
To provide a little more support, I quickly compiled a short list of other free resources (by no means complete) from industry regulators and providers that will help some people get up to speed and will serve as a review for others:
May you enjoy your MiFID II journey!
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