REGULATION

J O Hambro latest to pay for research costs under MiFID II

Funding of research when unbundling rules are implemented will cost the firm £5 million per year.

By Hayley McDowell hayley.mcdowell@strategic-i.com August 30, 2017 9:45 AM GMT

J O Hambro Capital Management has confirmed it will directly pay for external research used by its fund management teams when MiFID II comes into effect.

The buy-side firm said funding of the research is expected to cost the company around £5 million per year.

Ken Lambden, chief executive officer at J O Hambro, explained absorbing the costs was in the best interests of the firm’s clients.

“As a high conviction active fund manager, our proprietary research is key to delivering investment outperformance for our clients, but we also value access to selected research generated by external parties,” he added.

J O Hambro is the latest asset manager to decide to pay for research ahead of MiFID II’s unbundling requirements.

JP Morgan Asset Management, Vanguard and T. Rowe Price are among the buy-side firms who have also decided to absorb the costs of research under MiFID II.

The rules mean buy-side firms will no longer be allowed to pay for receive research paid for through execution commissions or commission sharing agreements.