IHS RPA Solution Addresses MiFID II Challenges
IHS Markit announced the launch of RPA Manager, a comprehensive service helping asset managers acquire investment research in compliance with MiFID II.
To reduce the potential for conflicts of interest, MiFID II requires asset managers to separate payments for research from trading commissions due to brokers that provide research. If an asset manager intends to use its clients’ assets to fund research payments, the manager must disclose research fees, allocate those fairly among client accounts, and receive client approval for research expenses. Payments must be made from segregated research payment accounts (RPAs) created by the asset manager.
The new RPA Manager solution provides an online toolset to assist firms in adhering to MiFID II requirements, including research budget calculation, tracking and allocation, managing funding of the RPA through direct debit or commission sharing agreements, reconciliation, reporting and document management. The solution will also soon integrate with the SWIFT network and help firms manage payments through a single interface for sending payment instructions to and receiving activity notices from the bank of their choice.
“Commission unbundling creates a series of operational and procedural challenges for asset managers. Solutions like RPA Manager will help trading, operations and compliance teams ensure they are synchronized and positioned to comply with MiFID II requirements related to investment research,” said Spencer Mindlin, analyst at Aite Group specializing in capital markets technology.
“Unlike other major regulations in capital markets, which have largely impacted sellside institutions, MiFID II imposes significant burdens on asset managers,” said Michael Aldridge, managing director at IHS Markit. “With RPA Manager and integrations to our other Brokerage and Research Services tools, we can offer firms an easy to deploy, scalable solution for administering research payments, tracking the quality of research, accounting for commissions and more.”
RPA Manager integrates with other research management services from IHS Markit, including Broker Vote and Commission Manager, to provide a holistic research, commission and payment management solution.
“Asset managers are bracing for an increase in operational intensity driven primarily by the looming MiFID II deadline,” said Tom Conigliaro, managing director at IHS Markit. “We are actively collaborating with customers on the design and implementation of a holistic workflow solution that will bridge our multiple services to help fund managers administer newly regulated activity, such as managing commissions and tracking and evaluating research.”
For asset managers seeking to outsource the administration of RPAs, IHS Markit plans to offer a service that can perform due diligence, governance and reconciliation activity on their behalf.
Regulatory reporting is an important part of MiFID II.
Notional outstanding in interest rate swaps grew 26%.
A briefing paper supports alignment of the clearing obligation under the EMIR and MiFID II.
UK divergences from EU in its wholesale market review.
AFME said MiFIR review should prioritise improvements in regulatory data definitions and collection.