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MiFID II unbundling highlights costs and opportunities in financial securities research

Implicit pricing will drive a sea change in Data

Research unbundling remains a global topic of concern for financial firms as MiFID II implementation nears in January 2018. The unbundling component of MiFID II puts regulations in place to insure that all forms of capital markets research are paid for separate from commission charges thus bringing in a new era of hard dollar research pricing for the buy side. The nearly $20 billion spent annually for research in the financial markets will evolve as buy side firms adapt to the explicit pricing which will become the norm due to these regulations. Implicit pricing from the sell-side is making assessment of the value of any research data utilized a critical mandate. This new mandate will force buy side firms to asses their total spend for research and the alpha value or beta insights provided from the data. This assessment process will drive buy side firms to direct these research dollars to firms which clearly add value - including alternative market data providers and boutique research data providers.

EU Regulation - Global Impact

While primarily an EU regulation U.S. based firms will need a keen awareness of the impact these regulations have on the global market for data. Some data will quickly become commodity data necessary to remain moderately competitive. This commoditization of data will usher in a new era of a rapid cycle of finding and implementing rapidly data essential to provide investment firms, asset managers and hedge funds with an alpha edge in the markets. Not only will U.S. based investment firms be required to have awareness of this changing research environment but also they may be required by overseas investors to follow these MiFID II research regulations to insure an research assessment parity in the global markets.

 

Alternate Market Data crucial to the research needs of the buy side

As a niche provider of alternate market data RelateTheNews is positioned to help global buy side market participants respond to MiFID II unbundling regulations. RelateTheNews provides real-time data as a service driving alpha for hedge funds, asset managers and more worldwide. Contact us today to meet your firm's needs for research and get ahead of the change forthcoming from these regulations.