Strategy

Another Asset Manager Joins Ranks Fronting MiFID II Research Costs

Josh O'Neill, Assistant Editor, 27 September 2017

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The directive aims to inject more transparency into Europe's fund management industry, which has historically faced criticism over its value for money.

Canada Life Investments is the latest asset manager to say it will cover the costs of equity research once a new European directive enters into force in January. 

The UK-based asset manager said in a statement yesterday it would “bear the costs of all research payments currently charged to funds” as of 3 January, 2018, when MiFID II takes effect. 

“The investment industry continues to evolve in response to regulation with MiFID II being a catalyst for many fund management groups to assess their business practices,” said Ian Goulsbra, sales and marketing director of Canada Life Investments. “At Canada Life Investments, we have always sought to be transparent partners to our investors, aligning our interests with theirs and offering value for money with regards to our fund charges.  This latest development continues our long-standing commitment to best practice for our customers.”

The second iteration of the European Union's Markets in Financial Instruments Directive will require money managers for the first time to “unbundle” the costs of investment research, separating them from trading and management fees. 

The directive aims to inject more transparency into Europe's fund management industry, which has historically faced criticism over its value for money.  

Canada Life Investments' announcement came after a recent survey by Liquidnet found that just 6 per cent of asset managers were ready to meet best execution requirements under MiFID II, despite the deadline date for implementation being just weeks away.

Liquidnet’s study found that more than a third of respondents – comprising asset managers operating in Europe and the US – acknowledged that they still had ground to cover in terms of adjusting policies and employing firm-wide formal processes.

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