Read also: How mifid II dissociation has shaken the research market We have also seen an increase in the number of counterparties who used asset managers for pure execution services. Fewer brokers are used for both research and execution. Several companies stated that the complete separation between execution and research allowed them to re-evaluate their use of low-cost delivery channels. B, such as e-commerce and algorithmic commerce. As a result, they are using less expensive channels more and are achieving new cost savings for customers. A somewhat unexpected result is the international resumption of the dissociation of research. Although it is not a regulatory requirement anywhere, but the EU – and the US, for example, have not alleviated certain elements – customers from Seattle to Sydney have been interested in the rules. The dissociation of research is rapidly turning into global best practices, with implications for sales analyst departments everywhere. Small brokers and independent search providers (IRPs) say these tactics push them out of the market because robust companies can benefit from economies of scale and continue to fund internal analyst divisions through enforcement commissions.
They also make the point that there is so little difference between cheap and totally free research that it is still technically an incentive. But the general feeling is that bank prices are driving down RPIs, which depend only on research commissions. The rules have made it more difficult for managers to use them in general, as they are often only relevant to certain trades, but the budget must be set in advance. In the summer of 2018, more than 50% of EU research funds went to global investment banks. We encourage companies to maintain the improved control we have seen in setting their research budgets and negotiating competitive prices with suppliers. Businesses must provide adequate oversight of all outsourced suppliers that use them to provide compliance services or to delegate portfolio management. We found that controls on external providers for delegation or outsourcing contracts are very different. Some companies are fully responsible for the compliance of external service providers, without ensuring that they retain control of this work.