What does the future hold for Mifid II’s unbundling rules?
By Tim Human
December 3, 2020, IR Magazine
It didn’t take long for Europe to roll back some of the strict rules surrounding research payments contained in Mifid II. As part of a Covid-19 relief package, the European Commission (EC) has proposed an exemption to unbundling rules for research on companies of less than €1 bn ($1.2 bn) in market cap. The aim is to stimulate more research on smaller issuers, which have witnessed declining analyst coverage for a number of years.
The tough unbundling rules contained in Mifid II, which force investors to pay for research either out of their own pocket or via a research payment account, were promoted by the UK’s regulator but opposed by authorities in France and Germany. With the UK now out of the EU, the field is clear to unpick some of the more contentious elements of the legislation.
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