North American Asset Managers Increasingly Concerned over Mifid II Impact
Survey from ITG finds buy-side firms in North America increasingly concerned over impact of European regulation due January 2018.
![Financial research Financial research](/sites/default/files/styles/landscape_750_463/public/import/IMG/471/356471/mifid-regulation-580x358.jpeg.webp?itok=EIdIdCEV)
While Mifid II is a Europe-centric regulation, it will have far-reaching consequences for asset managers with international operations, particularly in the areas of unbundling research payments, as reflected in ITG's survey.
Despite only 43 percent of respondents believing that the new regulation will have a "direct impact" on their business, 59 percent of those surveyed plan to continue paying for research using commission-sharing arrangements (CSA), while 33 percent expect to use a combination of both CSA and research payment accounts (RPA) for payments, and 8 percent plan to set up a new RPA ahead of the Mifid II start date. Eighty-two percent of those surveyed said that they plan to fully unbundle all of their brokers globally.
Under the upcoming Mifid II rules, asset managers will be required to explicitly separate or unbundle trading commissions from investment research payments. In order to continue paying for research alongside executions, asset managers will be required to set up a RPA.
"Mifid II is going to have a significant impact well beyond the shores of Europe, as institutional investors require asset managers to change the way they budget, fund, price and pay for research," said Jack Pollina, head of global commission management at ITG, in a statement. "North American firms are anticipating these changes and are taking steps now to adapt to the changing expectations of their end investors."
The survey polled over 100 buy-side professionals who participated in an ITG webinar on the impact of Mifid II regulations on North American asset managers, with average assets under management of $47 billion.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
US Supreme Court clips SEC’s wings with recent rulings
The Supreme Court made a host of decisions at the start of July that spell trouble for regulators—including the SEC.
This Week: FCA, Plato/Turquoise, Franklin Templeton, and more
A summary of the latest financial technology news.
Insurers deny cyber premiums are rising
Contrary to banks’ complaints, underwriters and brokers claim current market for policies is soft.
Size matters: US equity market players wrangle over new tick size regime
The industry expects the SEC to finalize the Reg NMS shake-up as soon as late summer. While there is broad agreement about the need for change, the extent of the reduction in access fees and tick sizes will have a big impact on markets.
CME: CFTC OKs clearing move to Google Cloud
The CFTC has given the Chicago-based exchange approval to run its clearing and settlement infrastructure on the Google Cloud Platform, while the exchange and vendor have extended their partnership to last until at least 2037.
Cutting through the hype surrounding the FDTA rulemaking process
A bill requiring US regulators and institutions to adopt a machine-readable data framework for reporting purposes applies to entity identifiers, but not security identifiers, in a crucial difference, writes Scott Preiss, SVP and global head of Cusip Global Services.
Northern Trust offers internal fund accounting, data tools to clients
Regulations and a mandate to enhance quality and transparency in a bid to improve the investor experience are pushing buy-side firms to have more oversight of their third-party providers.
EU firms press for faster move to T+1 after smooth US rollout
Following the example set by North America, 70% of attendees at a European hearing on shorter settlement cycles favored a Q4 2027 switch to next-day settlement.