Asset managers say they'll wait to adopt MiFID II rules
Asset managers in Europe have been slow to prepare for MiFID II regulations on unbundling research and dealing fees, with almost two-thirds not expecting to apply the regulatory reform before its start date of January 3 2018. Nevertheless, almost 90% had made some headway on implementing the rules, a survey at a Paris industry event found. The UK regulator, the FCA, separately said most companies were failing to meet expectations for MiFID II compliance and “several could not demonstrate meaningful improvements in terms of how they spend their customers’ money,”  it said.
Investment management firms are expecting to wait until the official launch of MiFID II before implementing unbundling, according to a survey.

At an all buy-side event hosted by ITG, Alpha Value and FinFees in Paris, 60% of attendees stated unbundling would not be implemented before the 3 January 2018 deadline.

The survey also found the majority of asset management firms have moved forward with MiFID II plans, with 89% stating they are in the preparatory phase, while 8% said they have not started.

UK authorities have taken a more assertive stance on unbundling compared to the regulator in France.

Following a publication of the UK regulator’s consultation on unbundling in October, market participants said the Financial Conduct Authority (FCA) had left ‘very little wiggle room’, unlike the French regulator.

The FCA recently found the majority of buy-side firms are failing to meet expectations for dealing commission requirements and unbundling.

“We identified poor practices at the majority of firms we visited and several could not demonstrate meaningful improvements in terms of how they spend their customers’ money through their dealing commission arrangements,” the authority said.

Another report has suggested European unbundling rules could reach beyond the region as large buy-side firms with a presence in multiple regions look to ‘lessen the burden’ of maintaining distinct research management processes in different parts of the world.

None of the US investment management firms surveyed in the report said they would be implementing two separate processes for the US and Europe, due to the administrative burden and costs involved.