MiFID II and Investment Research

“For an apparently simple process in theory, it is complex to implement in practice. We needed people who had already done this successfully."

“Our old process made us reactive - we couldn’t be sure we were processing all the payments we should have”

“Can we use our existing agreements under an RPA and still be compliant with MiFID II?”

With the introduction of new arrangements under MiFID II, including additional transparency and the options for Research Payment Account (RPA), there is an increased urgency for brokers and their investment manager clients to better support their MiFID II research strategies. Around half of those responding to a recent market survey said they were looking to make changes to systems and/or processes. From project work done in this area, it is clear that if your organisation is still using a manually intensive or spreadsheet based process you are unlikely to be MiFID II compliant in the medium to long. We work with partners Castine, a leading financial services software developer, to provide a powerful combined solution blending system, process and consulting for brokers which meets the complex regulatory requirements of MiFID II. MiFID II now places greater emphasis on research valuation, utilization, budgeting, and payment which became law on January 3, 2018.

Our annual survey of senior staff in financial institutions looks at trends and challenges for research distribution and unbundling, found that despite the obvious challenges and changes due to MiFID II, there was options for commission sharing agreements although they would be required to be under the umbrella of a MiFID compliant research payment account or managing the process of direct payments for research. Click here to see more on latest survey

Common Issues - Pragmatic Solutions

MPI Europe has delivered projects and research on commission management across a range of financial institutions from global brokers to asset managers and hedge fund managers. From our wide experience, we have identified many common issues faced by firms and the pragmatic solutions that help clients solve them.

Also members of financial firms can join our research/commission management group on Commission Managment group on LinkedIn

Even firms who have traditionally coped with these types of arrangements using manually intensive processes are now finding them difficult to scale (including expanding to new markets) and monitor with any confidence. Our recent research highlights the need for many firms to improve both their current research processes as well as enabling a path to migrate to the new MiFID II RPA and address research due diligence challenges.

To understand more about how other firms are improving their business processes please contact us for an initial discussion.

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