19 November 2017
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Changes in portfolio management under MiFID II

27 October 17 - RE+D Magazine
Changes in portfolio management under MiFID II

COMPANIES

ETAD.A.E.

Public entity - GREECE

IBI Group

Consultant - GREECE

Solum Property Solutions

Consultant - GREECE

Savills

Consultant - GREECE

PEOPLE

Antulio Richetta

Director IBI Group
The European Commission published guidance detailing how MiFID II rules on the provision of investment research would apply to non-EU managers with clients inside the bloc.

 

In a statement, Valdis Dombrovskis, the Commission’s vice-president for financial services, said the guidance would provide “greater clarity” on the new requirements.

The guidance states: “The MiFID II portfolio manager or its third country sub-adviser which operates a [research payment account, or RPA] is responsible for managing its research budget based on a reasonable assessment of the need for research and subject to appropriate controls, which include maintaining a clear audit trail of payments made to research providers.

“In addition, the MiFID II portfolio manager or its third country sub-adviser which operates an RPA must be able, at all times and based on its own internal allocation/budgeting process, to identify vis-à-vis its own clients the amount spent on research with a particular third country broker-dealer.”

The Securities and Exchange Commission (SEC) said it would grant a 30-month window for managers to find a way to unbundle research costs from trading costs for European clients, while still complying with US rules.

In the US, asset managers usually pay for brokerage services and research through a “bundled” commission payment, which runs contrary to MiFID II rules. Investors had expressed concern that they could lose access to “valuable” research, the SEC said.

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