New data discloses around 15% of UK investment firms have notified FCA of errors or omissions in transaction reporting under MiFID II.
When it comes to equity research, good intentions have gone awry. Nordic companies are increasingly bankrolling analysts now that banks are barred from folding research costs into trading fees.
The introduction of new European trading rules last year has resulted in asset managers slashing research budgets by as much as 30% but there is little evidence of a negative impact on the coverage of smaller companies, a multi-firm review by the UK financial regulator has found.
Buyside firms and IRPs explain that the directive’s stated aim – reducing conflicts of interest – has not quite been achieved. In some areas it’s even had the opposite effect, with the rise of corporate-sponsored research.
The directive’s downward pressure on the sales teams of investment banks is contributing to the rise of a two-tier system with personalisation for “high-touch” investors, and an automated service for lesser clients.