With MiFID II now in force, the buy-side industry is coming to terms with one of the regulation’s most contentious legislative standards: the unbundling of investment research.
Banks in Scandinavia are preparing to write equity research commissioned and paid for by listed companies, as they look for ways to recoup revenue losses because of MiFID II.
About a month into MiFID II, buyside and sellside companies across the globe are feeling the pressure of research unbundling.
The European Union’s sweeping MiFID II law came into force on Jan. 3. Well, at least some of it. The rest will show up in bits and pieces over a year or more and some parts may be rejigged after firms, lawmakers and regulators scrap over details.
The European Union’s long-anticipated implementation of MiFID II reform will change the way institutional investors pay for research.
MiFID II is a journey, not an event. Regulators are unlikely to police the rule with vigor in the early days and change is in store as MiFID II reviews kick off in 2019.
MiFID II requires asset managers to separate payments for investment research from those for brokerage services to execute trades.
As the investment-research industry transitions to MiFID II, which went live on Jan. 3, a question mark hovers over how regulators will enforce the research-commission restriction and deal with falling pricing models.
Regulators will grant financial firms a six-month delay in implementing part of the sweeping MiFID II overhaul of rules that’s set to take effect on January 3.
With less than 1 percent of notes affected by rules on price disclosure when MiFID II kicks in next month, years of lobbying by the bond industry appear to have paid off.