Asset managers: are you ready for the new MiFID regulations?
Ahead of the Business School’s masterclass on best practice in research procurement, Alistair Haig, Early Career Fellow in Finance, explains the importance of responding to research regulations with knowledge and skill.
Since 2013 researchers at the University of Edinburgh Business School have been analysing how professional investors procure information from external sources in what has become known as the market for investment research.
Rapidly reaching the top of the to-do lists of many chief investment officers and their research providers, our Best Practice in Research Procurement masterclass is a timely addition to the School’s event schedule, and is specifically aimed at executives responsible for research procurement.
Since joining the Business School in 2012, I have engaged not only with analysts, fund managers and regulators but also with entrepreneurs, including my co-speaker at the masterclass, Mike Carrodus, who founded the Substantive Research company to help match fund managers with the research they need.
Along with my students, I have collaborated with Mike and Substantive Research to refine the way in which they evaluate the large volume of financial research that is published on a daily basis and made accessible to fund managers. A Code of Practice has also been created for research procurement based on feedback from leading practitioners
And further developments are afoot. Under the Markets in Financial Instruments Directive II (MiFIDII), which is effective from 3 January 2018, fund managers will need to set pre-agreed budgets for research payments, provide detailed audit trails of payments made to research providers, and disclose transparent methodologies on how they select and pay for research. Although the directive is European, the effect will be global, not to mention a requirement of the UK regulator, regardless of Brexit.
Interestingly, a recent Business School study has provided evidence that the changes in payment mechanisms have allowed fund managers to obtain greater independence in the advice they purchase. They receive a wider choice of inputs and better value for money, while placing more emphasis on information processing rather than equity valuation. A preference for business research rather than securities research was also noted, and advice is emphasised over predictive accuracy. The masterclass will explore the implications of this.
|Monday 6 March 2017
|9:00am to 5:30pm
|Crowne Plaza London, 19 New Bridge St, London, EC4V 6DB
Drawing on real-world best practice and operational case studies, the one-day Masterclass, will equip those with responsibilities for responding to research regulations with the skills to ensure effective change management and profitability from these new processes. Sessions will focus on understanding the options, navigating regulatory risk and maximising profitability. The Masterclass is designed to suit all approaches to paying for research, and not only those which use dealing commissions.
Further information and alumni discount
If you are interested in finding out more about the masterclass then follow the links below for further information, course dates and booking details.
There is a 20% discount for all University of Edinburgh alumni.