Bundled research and execution services payments will improve access to data and alternative asset managers’ global competitiveness
Brussels, Belgium – MFA supported the European Securities and Markets Authority’s (ESMA) proposal to allow joint payments for research and execution services in a comment letter submitted yesterday. The letter is in response to ESMA’s Consultation Paper regarding amendments to the research provisions in the MiFID II Delegated Directive.
The return of a bundled research and execution option in the EU will positively impact EU asset managers’ global competitiveness by enhancing their access to high-quality research. Re-enabling bundling as an option will:
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Make the provision of research more efficient by reducing the need for separate, complex financial arrangements for research and execution.
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Further encourage research on small and mid-sized issuers.
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Foster competition by allowing investment firms to choose from a wider range of research providers, driving innovation and improving research quality.
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Bring the EU standards into closer global harmonisation with the U.S., UK, and other jurisdictions.
“The ESMA proposal will improve the accessibility of high-quality investment research for EU alternative asset managers,” said Bryan Corbett, MFA President and CEO. “Enabling joint payments for research and execution will enhance EU capital markets and EU funds’ global competitiveness. These benefits will extend to investors in EU funds, including pensions and endowments.”
MFA urges ESMA to ensure the joint payment model is flexible and does not impose overly prescriptive requirements that could deter investment firms. An overly complex set of conditions would dampen the enthusiasm for the joint payment model and limit its potential benefits. A more adaptable regulatory framework will foster greater adoption and enhance EU asset managers’ ability to access the research they need.
Read the letter here.
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About the global alternative asset management industry
The global alternative asset management industry — including hedge funds, private credit funds, and hybrid funds — serves thousands of public and private pension funds, charitable endowments, foundations, and other global institutional investors. The industry provides portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets throughout the economic cycle.
About MFA
Managed Funds Association (MFA), based in Washington, D.C., New York City, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest it, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 fund manager members, including traditional hedge funds, private credit funds, and hybrid funds, that employ a diverse set of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors diversify their investments, manage risk, and generate attractive returns throughout the economic cycle.
