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Compliance Update – April 2018

11th April 2018

Welcome to our compliance update. In this edition we look at:

  • the effects of MiFID II on our broker community to date
  • the continued rise of the quants and how TIM and our broker community are responding to their insatiable appetite for data.
  • features in the TIM that help compliance teams

MiFID II helping some brokers, hurting more

Among much of our broker community a relatively high rate of deal flow is keeping equity divisions afloat.

At the very top end, brokers known for their research capability have closed research deals with their entire client base. They are busy responding to research clients, managing corporate deals, and managing trade ideas.

Large brokers with a less-renowned research offering are as predicted finding the going tougher, with fewer meetings than last year and some confusion among their clients as to the level of service they can get without being billed extra. Buy-sides do not want to exceed their research budget, so they are being extra cautious on who they will meet. Clients may be happier to take a meeting with a knowledgeable generalist sales person without charge, than with an analyst for which they will be charged. As the first quarterly bills come out, clients may be pleased or shocked at what brokers are now charging for.

The best regional and specialist brokers appear to be benefitting both from good deal flow and strong research demand.

Many of our brokers worry that in a market downturn deal flow will no longer support their current cost base. On the other hand, there is some expectation that as the buy-side become used to paying for research from their P&L, budgets may be expanded. In the initial phases of MiFID II CFOs and COOs have ruled the roost. As PMs start to miss talking to their favourite analysts, they may push budgets higher.

How brokers are taking advantage of the rise of the quants

We published our white paper “Quantifying the Future” in 2016. The paper forecast the further rise of systematic investing, and of course quant funds have since then continued to attract an increasing share of active money. These large and growing quants want data for alpha generation or risk management. This is great for trade ideas, where we continue to see increasing demand, but this demand is also causing many brokers to consider what other data they can offer.

At TIM, we now regularly receive requests for alternative data from quants and suggestions for data we can help them to gather. We also receive offers of data from brokers interested in being rewarded for their information in a compliant way. Recently we have fielded requests and suggestions including macro ideas, sector and “client type” analysis around deal flow, innovative research offerings such as analyst buy-sell calls (instead of more opaque hold, overweight, etc), and the provision of MAR disclosure data. We are working with several parties to turn these requests and suggestions into reality. Does your firm want more data? Is there data that suitably anonymised and potentially aggregated with others that might be valuable? Don’t miss out! If you are interested in a discussion about data, compliance, aggregation and anonymisation, contact

Restricted Lists and additional TIM compliance features

As we have reported in earlier newsletters, many of our clients are finding that implementing their Restricted Lists in TIM has helped their compliance endeavours. As clients begin using this feature, they are also exploring the other TIM compliance features. Here is a brief overview of additional compliance tools that provide quick and easy access to the data so that you can better perform your trade ideas compliance reviews:

  • Screens – search, filter, view, customise, and export trade ideas and their history
  • Feeds – upload trade ideas into your own compliance systems, allowing you to integrate other datasets for bespoke customised workflows or provide an audit trail
  • Email alerts – receive drop copies of trade idea email alerts
  • Reports – receive reports to see recent trade idea activity

For more information, contact us at