EU backs 'unbundling' of MiFID II research and trading costs for asset managers

Another change of stance on fee transparency

The European Commission has proposed the full separation of research and trading fees for asset managers under MiFID II, despite appearing to reverse its stance on "unbundling" costs last year.

In the long-awaited draft rules published at the end of last week, the European Union's executives proposed that asset managers must either buy research with their own money or through a separate research payment account (RPA) funded in advance, unlinked to the volume of trades executed. Investment firms will also be required, upon request by their clients or by competent authorities, to provide a summary of the research provided, in order to avoid research from being considered an inducement. According to the draft rules: "Investment firms providing both execution and research serv...