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Compliance Update – October 2017

25th October 2017

Welcome to our regular newsletter. In this issue we summarise the much anticipated news from the SEC to resolve the conflict between US and European regulators around research unbundling payments. We also share details of two exciting upcoming events: our webinar looking at the future of research and the role of fund managers in ensuring research will flourish, and an unbundling conference looking at the best practises in research procurement. We also describe the reassurance contributors feel when their ideas are automatically checked against a broker’s restricted list, and bring highlights from the growth in our user base. Enjoy!

SEC publishes no-action letters

In a major development for US broker-dealers caught in the conflict between US and European regulatory regimes, the SEC has provided temporary relief to all US broker-dealers to receive payment for research from their European clients:

The Division of Investment Management provided temporary relief for thirty (30) months from MiFID II’s implementation date … to permit a broker-dealer to receive payments in hard dollars or through MiFID-governed research payment accounts from MiFID-affected clients without being considered an investment adviser.

Full text here.

Andrew Bailey, Chief Executive Officer at the FCA, reacted saying:

I am grateful for the constructive conversations with the European Commission and SEC over recent months, culminating in today’s announcements. The outcome represents a flexible solution that respects the integrity of both regulatory regimes. …
We will continue to engage with firms on their implementation of MiFID II ahead of the 3 January 2018, and will monitor evolving market practices once the new rules are in effect to ensure compliance and evaluate the impact of the changes.

Full text here.

Webinar: The new role of alpha in research valuation (9th Nov)

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 beyond compliance, for research that gives them an edge, generating alpha. If they establish appropriate processes, they can be the drivers to ensure the best research rises to the top.

Join me and Mike Carrodus (founder of Substantive Research) on Thursday 9th November as we explore the danger that MiFID II will create a research wasteland – and the role of fund managers in ensuring that valuable third-party research is effectively nourished.

You can register here.

Conference: Unbundling Uncovered 2017: Defining best practice in research procurement (2nd Nov)

Substantive Research are hosting a conference on Thursday 2nd November which we will be attending. This event will allow asset managers to benchmark their plans to comply with MiFID II’s research regulations, and will ensure banks and independent research providers can explore how these changes will affect them. Will all asset managers be funding research from their own P&L, or will the RPA structure still prove popular amongst certain segments despite recent newsflow? Panels will cover the CIO perspective, RPA and P&L funding best practice, the changes in provider business models, charging for FICC research, and technology and platform solutions.

Full agenda here.

To request an invitation please contact

Restricted List removes a risk

What is the cost of accidentally making a recommendation on a restricted stock? TIM allows firms to prevent this mistake with trade ideas. If an author enters a trade idea on a restricted stock, they are either warned that they shouldn’t send the idea, or depending on firm policy, they are blocked from sending the idea automatically. Feedback we’ve received from users is that TIM allows them to confidently send trade ideas knowing that they are protected by the system. If you would like to know how your authors can benefit from this protection please contact us at

20% Growth in Q3 for MAR investment recommendation adoption

Client uptake on our complete MAR solution is up 20% quarter-on-quarter. This includes TIM providing logging for the recommendations, attaching the appropriate disclosures, full one year recommendation history, and quarterly aggregated disclosure reports. We have just finished the Q3 reports for this year. If you would like to learn more about our solution, please contact us at