UPDATE
DERIVATIVES BUY-SIDE
trueEX plans
launch of crypto-
currency market-
place Fidelity International backtracks
on MiFID II research payments
trueEX is to roll out a market-
place for digital assets in a bid to
win business from institutional
investors planning to enter the
cryptocurrency market.
The firm said initial contracts
will be available for Bitcoin
non-deliverable forwards settled
in USD, listed under a new brand
‘trueDigital’ on its existing swap
execution platform.
The trueDigital contracts will
be subject to licensing agree-
ments with the newly created
trueDigital Holdings business,
which will act as the sales arm
for new products.
trueEX said despite digital
assets comprising in excess of
$430 billion in market capital-
isation, the marketplace has
been lacking regulatory and
technology building blocks for
institutional involvement.
“Institutional investors and
commercial partners are ready
for a regulated and liquid
marketplace to gain exposure
to and hedge these increasingly
important digital currencies
and commodities,” said trueEX
co-founder and CEO, Sunil Hirani.
UK firm to absorb costs of research under MiFID II after
opting for CSA/RPA model in October last year.
F
idelity International has
decided it will no longer pass
research costs, on to its investors
under new MiFID II rules and will
instead absorb the costs follow-
ing extensive discussions with its
clients.
In a statement, Fidelity said
it will not apply client account
charges for research irrespective of
investment vehicle, client type or
geographic location.
“Our decision to absorb external
research costs reflects our desire to
act continually in the best interest of
our clients,” said Paras Anand, CIO
for equities in Europe at Fidelity.
“A key part of our initial deci-
sion to implement the research
payment account (RPA) approach
was our desire to have a model
that would treat all clients equally
whether they were captured by the
MiFID II regulations or not.”
Fidelity confirmed its inten-
tions to implement a commission
sharing agreement (CSA) and RPA
model in October last year, when
the firm highlighted the debate was
too focused on how asset managers
will pay for research, rather than
the cost of services asset managers
deliver.
“The overwhelming industry con-
sensus has been to not embrace the
RPA model which in turn means
our clients, in most cases, would
face disproportionate operational
and reporting consequences were
we to retain this approach,” Anand
added.
“These client challenges and
inefficiencies were not what we
envisaged so we have decided to
move to a Fidelity-funded research
model, effective from 3 January
2018 when the new regime became
operational.”
Issue 55 // TheTradeNews.com // 9