News & Insights

Regulatory

Nov 17, 2017

MIFID II – Equity Research

With MIFID II soon to come into effect (3rd January, 2018), questions remain, what does this mean for the future of equity research and why should it matter to Australian investment firms?

A key component of MIFID II is the requirement for research to be explicitly priced, or “unbundled” from trading activity. Although the incoming regulation is solely an EU directive, it has far reaching global ramifications that are expected to cause a re-think by both the buy and sell side, of how research is consumed, paid for, and ultimately priced.

A McKinsey Report titled “Reinventing equity research as a profit-making business” (Jun 2017), paints an interesting picture of a post-MIFID II world, and sets out the scenarios that may evolve because of these changes.

https://www.mckinsey.com/industries/financial-services/our-insights/reinventing-equity-research-as-a-profit-making-business