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“ UK hedge funds prefer the stability of their current RPA setup.”
JOE ABDALLAH, GLOBAL HEAD OF ACCOUNT MANAGEMENT AT KEPLER
costs, with firms required to put in place set-ups that evidence how the separation is done more broadly.
Following this, the FCA followed up with a new rule focused on fund managers, with a pay for research model introduced, including a joint payment option.
The decision also came off the back of recommendations from the IRR and pertained to the full-scope UK alternative investment fund managers( AIFMs).
The rules allowing fund managers to pay for investment research using a joint payment option for research and execution services were based on those introduced for Mifid investment firms.
Speaking to the TRADE at the time, Carrodus explained:“ Now that buy-side firms can budget for research at a strategy level, the group that are motivated to transition over to CSA-funded research will expand materially.“ The next question will be how quickly they can move across, with a small group getting it done by the end of the year and a much larger contingent now targeting 2026.”
Notably, the FCA in both instances opted not to reimplement‘ full rebundling’, with the watchdog explaining that this would lead to opacity of prices paid for research services, as well as hinder the comparison of what prices have been paid to research providers, and subsequently hinder competition on both the trade execution and research side.
Demonstrably, the new rules appear to be here to stay and with this in mind, firms are now in the midst of analysing their set ups to make the most of this presented opportunity.
Speaking to The TRADE, Giulia Pecce, head of secondary capital markets and wholesale investor protection policy at AFME, said:“ The recent rules for pooled vehicles is good news as firms will be able to make a holistic assessment of the new payment option across the franchise.
“ In particular, the increased flexibility on budgeting rules is a welcome improvement compared to consulted-on rules. The new framework needs to be assessed in its entirety and no
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