RPAs will still be funded via CSAs under MiFID II, say 91% of firms

Despite initial confusion following the release of the delegated acts last month, most firms say research will be paid for via RPAs, funded by CSAs.

Over 91% of companies agree research will be paid for via research payment accounts (RPAs) funded by commission sharing agreements (CSAs), following the release of the MiFID II delegated acts last month.

Almost 70% of firms say CSAs are still viable in a post-MiFID II environment despite the initial confusion as to whether CSAs would be valid under the new rules.

MPI Europe, which carried out the recent survey on research payment methods, found that despite their apparent popularity, there are some concerns about the use of CSAs.

The report explained: “Some have expressed an operational concern that the additional administrative burden of maintaining a CSA process under MiFID II could be prohibitive of their continued use.”

Various buy-side firms have already started operating this way, but the “granularity that would be required to provide transparency around the allocation of a research charge could render these processes insufficient.”

Despite this, MPI Europe said since the delegated acts were released, CSAs have been given a “new lease of life” and the “stagnation” will be brief as RPAs are set “pave the way to a new way of unbundling.”