Buy-side anticipate unbundling compliance by year-end

Survey revealed 85% of asset managers expect to be compliant with unbundling by Q4 2017 or later.

The majority of buy-siders are confident on being compliant with MiFID II’s unbundling rules by the end of this year, according to research.

A poll of 562 asset managers conducted by RSRCHXchange found 85% expect to comply with the rules in the fourth quarter this year or later, up from just over 50% of respondents in the second quarter last year.

The survey revealed more confidence amongst the buy-side with more than 60% having already set or begun to set their research budgets. 

Despite this, setting and assessing research budgets was seen as a challenge for 40% and the process is being held back by lack of information on research pricing.

An event hosted by The TRADE earlier this year saw FinTech specialists express concerns over the sell-side’s ability to price research for the buy-side.

Scott Winship, co-founder of Alpha Exchange, told delegates the sell-side is unsure what the buy-side wants in terms of research.

“The sell-side haven’t worked out their own models and they haven’t worked out the pricing specifically - but that’s what they’re doing now. I think they’re too scared to price accurately and that’s why they’ve kept the bundle as wide possible,” he said.

The survey also revealed decisions on which payment method to use are also being made, with just 36% still unsure on whether to use transactional RPA, RPA funded by a direct charge to the client, P&L or a hybrid model.

Jeremy Davies, co-founder at RSRCHXchange, explained its clear decisions are being made and the largest asset managers are most advanced in their process.

“Although we see overall MiFID II readiness slightly pushed back towards Q4 2017 or early 2018, there is no doubt that the unbundling process is well underway.

“At the same time, the onus of setting a price for research rests firmly with providers; as of now this process is not yet well advanced,” he said.