So, what’s it all about? There is a huge change in Europe coming. Are you ready? Ready for what? The murky area of accountability in our industry is about to become a whole lot clearer. Amongst other things, it will have a huge impact on investment research. It will not only have an impact on Europe, but globally too. Very few firms are talking about it right now but if you are an investment manager anywhere in the world, you should be thinking about positioning yourself.
MiFID II, an upcoming piece of legislation from EU regulators that takes effect from January 2018, changes the relationship between trading commissions and investment research. You may say, “why do you care if you are not in Europe?” Well, apart from forcing the pricing of external research, this change will have a global impact as money managers are required to justify what they are paying for. Whilst US-based asset managers may not have to comply with MiFID II, from what we have seen, more and more funds are having to justify their expenses to investors.