Mifid II research unbundling to be global norm

Author: John Crabb | Published: 14 Jul 2017

With the deadline looming closer, the extraterritorial reach of the Markets in Financial Instruments Directive II (Mifid II) on third countries is yet to be clarified - but a regulatory domino effect is likely.

The directive has come as something of a wakeup call to the US, a financial system more used to imposing its own regulation on the world than being made to comply with others, but the Securities and Exchange Commission (SEC) remains silent on whether it will provide any form of relief.

Thom Tillis, a US senator of North Carolina, recently penned a letter to chairman Jay Clayton asking for clarification of the SEC’s stance on regulatory relief of the EU legislation, reiterating a point addressed in an earlier IFLR article.

Once enforced, the directive will require investment research payments to be unbundled from executions, forcing clearly defined identifiable charges so that anyone providing or receiving research...