Asset managers are likely to pay for the research they consume directly from their own funds as investors struggle with Mifid II regulations on unbundling, a panel of industry experts agreed at TradeTech today.
The panel discussed the methods of paying for research, following the release of the delegated acts last week, and agreed that firms opting out of CSA payments will instead pay for their own research internally.
Rob Boardman, chief executive officer at ITG Europe, explained moral pressures on firms to “take the high ground” and the administrative burden, which was highlighted in the delegated acts, are the reasons behind the trend.
Mark Pumfrey, head of EMEA at Liquidnet, explained investment style was also important to this continuing trend.
He said long term asset managers, will try to “cut out market noise”, paying for and consuming their own resources.
The panel looked at the recent news from Woodford Investment Management, which decided to no longer charge clients for the use of their research.
Panelists agreed this trend is likely to continue.
A decline in cash equities businesses is also expected to continue, following Mifid II regulations, the panel agreed.
Nomura is expected to cut around 500 jobs in its cash equities business in Europe, as well as its equities research unit, according to reports circulating this morning.