TIM MIFID II Solution
Compliance with the upcoming directive
The Markets in Financial Instruments Directive (MiFID) II introduces many changes. TIM Group is closely tracking the industry’s unfolding understanding of the directive’s impact on the unbundling of research and execution, and the impact on sales teams and research analysts.
Many of our 250 buy-side clients both in Europe and overseas have been considering how they will pay for sales coverage under the new regulation.
Trade ideas appear to provide at least part of the answer. Trade ideas are substantive research (as defined by the ESMA, FCA and other European regulators) and therefore are the only non-execution service that can be paid for from client funds.
Trade ideas allow investment firms to gain control of their broker sales coverage and reward the best ideas, ensuring their processes are fair and, more importantly, compliant.
How TIM supports buy-sides to comply
Trade ideas are a demonstrable source of alpha. Unlike phone calls, emails or face to face conversations, they are transparently delivered, recorded and evaluated.
By using trade ideas to evaluate broker performance, investment managers can be sure the rewards are correlated appropriately with the alpha their brokers provide. This is the essence of what regulators are trying to achieve with unbundling, and is, we believe, an appropriate use of client funds.
Past Webinar Recordings
November 2017: The new role of alpha in research valuation
For many in the investment community, alpha is a concept confined to the trade idea space. Are things about to change?
Unbundling could mean the best, most insightful third party research will be rewarded, and generic research disappear. There is danger of low-value research subsidised by brokerage or investment banking activity driving out good research. Fund managers should look to research to give them an edge, generating alpha. If they establish appropriate processes, they can be the drivers to ensure the best research rises to the top.
Listen to Colin Berthoud (founder of TIM) and Mike Carrodus (founder of Substantive Research) as they explore the danger that MiFID II will create a research wasteland – and the role of fund managers in ensuring that valuable research is effectively nourished.
May 2017: MiFID II – how major buy-side firms are managing sales coverage under MiFID II and paying for broker ideas from client funds
As the industry prepares for the arrival of MiFID II in January 2018, we have been speaking with the buy-side and sell-side about the implications of the Directive, particularly around unbundling.
In this webinar Colin Berthoud (founder of TIM) describes this new opportunity and how the buy-side are getting the most from their sales and analyst content using TIM.