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Lionel Laurent

The Brexit Regulatory Bonfire the EU

U.K.-led restrictions on investment research are being picked apart on the continent. It may be too little, too late.

The parting of ways begins.

The parting of ways begins.

Photographer: Luc MacGregor/Bloomberg

One of the biggest ironies of the Brexit crusade against “suffocating” red tape from the European Union was that the U.K. was at the forefront of some of the bloc’s most onerous financial regulation after the 2008 crisis. 

That included a crackdown on opaquely-funded investment research — rolled out across the EU in 2018 as part of the MiFID II financial rule-book reforms — which forced fund managers to budget and pay for investment research ideas separately from actual trading and investing. This so-called unbundling brought more transparency, but led to higher costs and an all-out price war, predictably won by banks charging $10,000 a year rather than independent analysts charging $2,000 per PDF.