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Report: MiFID II Leaves Research Costs Up for Negotiation

A report in Bloomberg explores the wide range in research costs charged to institutional investors in the wake of the EU’s MiFID II regulation, which required asset management firms to unbundle payments for research and trading commissions. Bloomberg, citing research from Integrity Research, finds that research provider firms in Europe are making less than peers elsewhere and that asset management firms are using their negotiating advantage to squeeze more out of research firms. The median average payment for research in Europe was $25,000, about 40 percent lower than in North America, the report noted.  Integrity Research projects that research payments in Europe will fall 8.5% “as many of the asset managers subject to MiFID II will reduce the number of research counterparties they use in 2019 versus just cutting their research payments to each provider as was done in the prior year.” Integrity also projects that research spending in North America will fall 5.0% since fewer asset managers here are subject to MiFID II and will be able to continue using client commissions to pay for their sell-side and independent research. 

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