Latest research into the effect of the MiFID II capital markets changes on securities research shows many asset managers are making it their global policy to unbundle research from execution.
Liquidnet and Plato Partnership found that 53% of investment management firms they surveyed said they had already implemented a global policy for splitting payments for research and execution in line with the updated Markets in Financial Instruments Directive (MiFID II) in Europe.
Another 20% of the 55 firms surveyed said they would do this within the next five years.
The global adoption of the MiFID II model was said to be down to investor demand.
A further finding was that 61% of asset managers have reduced the number of research providers they use, but 55% still take research from more than 50 providers globally. Just over three quarters of respondents access small and mid-cap research from more than ten different brokers.
Rebecca Healey, regional head of market structure and strategy at broker Liquidnet, said: “It isn’t surprising that unbundling is a global phenomenon just one year after the implementation of MiFID II. Across the world there has been a growing demand from end-investors to be assured that they are getting value for money, and a need for greater transparency is a direct consequence of this.”
She added that as research unbundling becomes the norm, firms are likely to start seeing significant benefits deriving from data they have gathered. “Ability to track research providers, the type of research they provide and at what cost unlocks possibilities that weren’t previously available, all leading to an increased value for end-investors,” Healey said.
©2018 funds europe
