2018年-FCA英国金融行为监管局_mifid_ii_research_and_inducement_5页_252kb

Summary of Regulator Assessment: Qualifying Regulatory Provisions

Title of Proposal

Extension of the MiFID II research and inducements provisions to collective portfolio managers (CPMs)

Lead Regulator

Financial Conduct Authority (FCA)

Date of Assessment

20 December 2017

Commencement Date

3 January 2018

Origin

Domestic extension of EU legislation

Implementation of Cutting Red Tape Review

No

Affected Areas

Whole of the UK

Core Content

The FCA proposed to extend the MiFID II provisions that restrict the receipt of material non-monetary benefits by firms providing individual discretionary portfolio management (IPM) services to collective portfolio managers (CPMs). This includes fund managers under the UCITS and Alternative Investment Fund Managers (AIFM) Directives. The aim is to address market failures and improve transparency and fairness in how research costs are passed on to investors.

The FCA has decided to apply similar standards to CPMs as those for IPMs, requiring firms to either pay for research directly from their own resources or through a research payment account (RPA) that is funded by a specific, separate client charge. This charge must be agreed and disclosed upfront, and be based on a research budget not linked to execution volumes.

Main Viewpoints

• Regulatory Alignment: The FCA seeks to align CPM regulations with MiFID II standards to ensure fair and transparent treatment of investors.
• Market Failure Addressing: The changes are intended to remove potential conflicts of interest by preventing firms from receiving non-monetary benefits that could influence execution decisions.
• Cost Considerations: The FCA acknowledges that compliance costs will vary depending on whether firms opt for direct payments or RPAs, with RPAs being the costlier option.
• Consumer Benefits: The reforms are expected to benefit investors through improved protection, increased returns, and greater control over research costs.

Key Information

• Estimated Affected Firms:

  • Total CPM firms: 1,044
  • Mixed-scope firms (CPM + IPM): 670
  • Firms intending to apply MiFID II standards to CPM: 596
  • Firms not intending to apply: 74
  • Non-MiFID CPM firms: 374
  • Exempt firms (private equity and venture capital): 137
  • Final estimate of potentially affected firms: 311

• Compliance Costs:

  • One-off costs: Estimated between £3.8m and £8.4m, based on an average cost of £36,000 per firm.
  • Ongoing costs: Estimated between £2m and £4.5m, based on an average cost of £19,000 per firm.

• Cost Components:

  • One-off costs:
    • Revising internal governance and policies for research budgeting.
    • Upgrading IT systems to track and review research usage and payments.
    • Establishing written research policies and periodic disclosure templates.
  • Ongoing costs:
    • IT maintenance and reconciliation of research charges.
    • Annual review of research policies and budgets.
    • Enhanced periodic disclosures and detailed research quality assessments.

Impact on Business

• The one-off costs are primarily associated with the implementation of new policies and systems, including the establishment of RPAs.
• Ongoing costs are related to the maintenance of these systems and the continued compliance with research cost disclosure and review requirements.
• Firms that fully delegate their investment management to MiFID firms are expected to incur minimal or no direct costs.
• The FCA estimates that the total cost to business is likely an over-estimate, as some firms may opt for direct payments instead of RPAs.

Additional Information

• The BIT score is 19.2, indicating the policy is expected to have a net benefit to the economy.
• The Net cost to business (EANDCB) is estimated at £3.8m.
• The Business Net Present Value is -33.1, suggesting a negative impact on business value, though this is offset by consumer benefits.
• The relevant consultation paper is: FCA, September 2016, CP16/29: Markets in Financial Instruments Directive II Implementation - Consultation Paper III

Conclusion

The proposed extension of MiFID II research and inducements rules to CPMs aims to enhance transparency, fairness, and investor protection. While it introduces compliance costs for some firms, the FCA believes the benefits to consumers and society outweigh these costs. The assessment highlights the importance of proper implementation and the potential for cost savings if firms adopt direct payment methods over RPAs.