Regulators confirm research access in the US post Mifid II


UK asset managers will be able to temporarily access investment research from the US after months of lobbying to clarify new inducements and research Mifid II rules.

In a statement on its website, the European Commision has confirmed the US regulator, the Securities and Exchange Commission, has decided US brokers can provide European money managers with their research without the need to register as investment advisers.

European and American investment firms have sought after clarity on how investment research payments in the US regulations would clash with the upcoming EU law, which is coming into force in less than 10 weeks.

European Commission vice president for financial services Valdis Dombrovskis says: “With the issued guidance EU firms will have greater clarity on how to deal with non-EU brokers that provide research. In this context, we welcome the decision of the staff of the US Securities and Exchange Commission to simultaneously agree to relief for US brokers supplying research to EU firms.”

Earlier this month, Bank of America Merrill Lynch applied to SEC to become an investment adviser in order to be able to market its research to global buy-side players.

The Polar Capital Technology Trust has previously warned tech funds will face more hurdles than others from Mifid II due to their use of US brokers.

FCA chief executive Andrew Bailey has welcomed the move from the two regulators saying he is “grateful” that the ongoing conversations on the upcoming reforms have come up to a solution.

He says: “The clarifications provided by both the European Commission and SEC staff will address key concerns raised with the FCA by UK market participants. They ensure that firms can continue to access US research from 3 January 2018, while also maintaining the investor protection safeguards of the MiFID II regime.”

Bailey says a continued access to research produced by the US and other non-EU jurisdictions are “the best way of serving investors”.