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MiFID II impact on investment research rules a key worry 

October 27, 2015

Kirsten Hastings, Portfolio Adviser

The existing Markets in Financial Instruments Directive (MiFID) was launched in 2007, opening up competition in equity markets.

MiFID II is set to transform trading and transparency even further, although this time the greatest effects will be on derivatives and fixed income markets.

David Strachan, partner in Deloitte’s EMEA Centre for Regulatory Strategy, said: “MiFID II will increase costs and reduce margins, as the increased costs are unlikely to be passed on to investors due to competition and increased transparency on costs and charges.”

Key strategic challenges

Two-thirds of survey respondents said the investment research rules would be a key strategic challenge of MiFID II.

These rules have been a contentious part of EU negotiations; and, if implemented in their current form, would require the unbundling of investment research payments from dealing commissions.

Investment managers expect that it will lead them to increase their scrutiny over the quality of research and shrink their research budgets.

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