IHS Markit tackles MiFID II challenge for buy-side
29 June 2017 London
Image: Shutterstock
IHS Markit has launched RPA Manager, a new service to help asset managers acquire investment research in compliance with the second Markets in Financial Instruments Directive (MiFID II).
The solution aims to provide an online toolset to assist firms in adhering to MiFID II requirements, including research budget calculation, tracking and allocation, managing funding of the research payment accounts (RPAs) through direct debit or commission sharing agreements, reconciliation, reporting and document management.
RPA Manager will soon integrate with the SWIFT network and help firms manage payments through a single interface for sending payment instructions to and receiving activity notices from the bank of their choice.
To reduce the potential for conflicts of interest, MiFID II requires asset managers to separate payments for research from trading commissions due to brokers that provide research.
Asset managers using its clients鈥� assets to fund research payments must disclose research fees, allocate those fairly among client accounts, and receive client approval for research expenses.
These payments must be made from segregated RPAs created by the asset manager.
Michael Aldridge, managing director at IHS Markit, said: 鈥淯nlike other major regulations in capital markets, which have largely impacted sell-side institutions, MiFID II imposes significant burdens on asset managers.鈥�
鈥淲ith RPA Manager and integrations to our other brokerage and research services tools, we can offer firms an easy to deploy, scalable solution for administering research payments, tracking the quality of research, accounting for commissions and more.鈥�
Spencer Mindlin, analyst at Aite Group specialising in capital markets technology, added: 鈥淐ommission unbundling creates a series of operational and procedural challenges for asset managers. Solutions like RPA Manager will help trading, operations and compliance teams ensure they are synchronised and positioned to comply with MiFID II requirements related to investment research.鈥�
For asset managers seeking to outsource the administration of RPAs, IHS Markit plans to offer a service that can perform due diligence, governance and reconciliation activity on their behalf.
The solution aims to provide an online toolset to assist firms in adhering to MiFID II requirements, including research budget calculation, tracking and allocation, managing funding of the research payment accounts (RPAs) through direct debit or commission sharing agreements, reconciliation, reporting and document management.
RPA Manager will soon integrate with the SWIFT network and help firms manage payments through a single interface for sending payment instructions to and receiving activity notices from the bank of their choice.
To reduce the potential for conflicts of interest, MiFID II requires asset managers to separate payments for research from trading commissions due to brokers that provide research.
Asset managers using its clients鈥� assets to fund research payments must disclose research fees, allocate those fairly among client accounts, and receive client approval for research expenses.
These payments must be made from segregated RPAs created by the asset manager.
Michael Aldridge, managing director at IHS Markit, said: 鈥淯nlike other major regulations in capital markets, which have largely impacted sell-side institutions, MiFID II imposes significant burdens on asset managers.鈥�
鈥淲ith RPA Manager and integrations to our other brokerage and research services tools, we can offer firms an easy to deploy, scalable solution for administering research payments, tracking the quality of research, accounting for commissions and more.鈥�
Spencer Mindlin, analyst at Aite Group specialising in capital markets technology, added: 鈥淐ommission unbundling creates a series of operational and procedural challenges for asset managers. Solutions like RPA Manager will help trading, operations and compliance teams ensure they are synchronised and positioned to comply with MiFID II requirements related to investment research.鈥�
For asset managers seeking to outsource the administration of RPAs, IHS Markit plans to offer a service that can perform due diligence, governance and reconciliation activity on their behalf.
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