[ M A R K E T
R E V I E W
warns “there is still not much awareness of exactly
what firms will need to do under MiFID II’s best exe-
cution provisions.”
Getting unbundled
A related area where there is much less certainty is
around unbundling of execution commissions. The
new rules under MiFID II mean that payment for
research (or any other service) through execution
|
M I F I D
I I
O V E R S E A S ]
commissions is considered an
inducement and therefore banned.
It also sets tougher rules on trans-
parency of research costs, all of
which ultimately fall on the asset
manager.
While some US firms are already
unbundled and make hard dollar
payments for research, many con-
tinue to rely on the bundled com-
mission system. While they will
not be obliged to unbundle locally,
they may need to consider where
they are trading and who their
Issue 52
TheTradeNews.com
61