[ N E W S
R E V I E W ]
UK research unbundling
a mixed bag as US asset managers
also embrace the change
The first review of new rules under MiFID II has found little negative impact on the
UK research market, while US asset managers are increasingly adopting a similar
tactic for research acquisition and consumption.
T
he Financial Conduct Au-
thority (FCA) has released
the findings of its survey
on the effects of research unbun-
dling on the UK financial services
industry, most notably a cost saving
of £70 million for investors in UK
equities funds.
A survey of 40 asset managers
and 10 firms across the buy- and
sell-side conducted earlier this
year by the UK regulator found
that so far under MiFID II, the
18 // TheTrade // Fall 2019
manner in which UK financial
firms had implemented the new
rules around the separation of
research payments and execution
fees has resulted in “improved ac-
countability and scrutiny over both
research and execution costs.”
The most notable finding was the
change had resulted in “around
£70 million of savings for investors
in UK-managed equity portfolios”
during the first half of last year,
compared with 2017.
A significant concern for asset
managers prior to the introduction
of MiFID II at the start of last year
was the possibility that access to
and quality of research would be
diminished, however the FCA
stated that it found “no evidence
of a material reduction in research
coverage”, including for listed
small and medium enterprises.
Despite there being no restric-
tions on the access to required
research, there was evidence that