In Europe, Unbundling Proposals Spark Anxiety, Opposition

实施后一个月只有一个月禁止使用佣金to pay for corporate access, in June, the U.K.’s Financial Conduct Authority stunned the investment community by endorsing a European proposal to sharply curtail the use of trading commissions to pay for research. Stakeholders all along the financial services spectrum have been trying to gauge the likely impact ever since.

“如果它拟议的拟议发生，它意味着市场运作方式的海洋变化，”史蒂夫凯利争夺了分析师和企业经理的意见调查，该公司的香港WeConvene的基于伦敦的数据收集单位。在“意想不到的后果”中，随着他所说的，因为他所说，研究委员会的规模和频率可能存在大幅下降，减少覆盖率和流动性 - 特别是对于较小的球员来说 - 以及竞争中的整体下降。“对资本市场的活力是健康的吗？”他问。

Others insist that this latest development is merely continuing a process that began nearly a decade ago when an FCA predecessor, the Financial Services Authority, prohibited so-called soft-dollaring — the practice of passing along unspecified research fees to investors via trading commissions bundled with execution costs — to pay for anything other than proprietary research (that is, not data terminals, news subscriptions, overhead and so on). By 2006 the U.S. Securities and Exchange Commission had followed suit, to an extent. It revised the parameters of the safe harbor provision of the Securities Exchange Act of 1934, allowing asset managers to include in their commissions only expenses that are in the best interests of the fund, narrowly defined as “advice, analyses and reports.”

Fast forward to spring of this year. The European Securities and Markets Authority issued a 349-page proposal called, collectively, theMarkets in Financial Instruments Directive II(the first MiFID took effect in 2007). Its Article 23 states that research not explicitly paid for in cash is tantamount to a “receipt of inducements from third parties” — essentially a bribe — that European Union member countries should prevent.

Within weeks, France’s Association Française de la Gestion Financière, Germany’s Bundesverband Investment und Asset Management, Sweden’s Fondbolagens Förening and other industry groups objected. “If an unbundling scenario were to play itself out, we think the consequences could be quite adverse for the European fund management industry,”菲利普米德尔顿，美国银行Merrill Lynch的分析师，2014年专业和其他金融的3号团队领导者All-Europe Research Team在6月的一份报告中写道。“支付研究directly rather than out of dealing commissions could add approximately 7 basis points a year to the cost of managing equity mandates, we think. This in turn could equate to 30 percent to 40 percent of the profit margin from equity mandates.”

A likely result, Middleton concluded, would be to “make Europe a relatively unattractive area for asset management.” (Middleton and BofA Merrill declined further comment.)

然后FCA认可的Mifid II，在其上说July Discussion Paperthat U.K. investment managers pay some £3 billion ($5 billion) to brokerages annually, half of which is ostensibly for research. “We have had ongoing concerns about investment managers’ controls over the use of dealing commissions and the conflicts of interest it creates for them as agents to their customers, given the lack of transparency of these costs,” the statement reads. “This is exacerbated by the largely unpriced and opaque market for research.”

Even those who agree that transparency could be improved are taking exception. “The whole idea that we are in some way inducing asset managers to behave in inappropriate ways is completely ludicrous and shows a fundamental misunderstanding of the way the equity market functions,” says one sell-sider in London, who spoke on condition of anonymity. He further calls the FCA hasty in backing ESMA’s plan before hearing from all sides involved. “It plainly admits to looking at just 17 investment managers and finding fault with only 15 of them — that’s a pretty small sample.”

通过奥克托FCA表示,它将接受反馈ber 10. ESMA ended its open-comment period in mid-August, promising to issue a revised final version by March 2015 that will go into effect January 2017. All 28 member nations, including the U.K., must comply (and some could go even further). “This is too premature a matter to comment on,” insists Reemt Seibel, an ESMA communications officer based in Paris.

在美国，同时，证券交易所通讯总监吉娜塔拉莫纳拒绝了评论。

但FCA首席执行官Martin Wheatley没有。“研究在资本市场起着重要的部分。特别是，随着投资者寻求长期增长潜力的股票，“小型和中型公司”可以从研究报道中汲取真正的好处，“他告诉亚博赞助欧冠，向市场参与者保证他们的担忧并没有陷入聋哑人身上。“鉴于客户的价值客户在研究中，我们认为他们愿意通过投资管理费支付外部研究 - 完全按照他们现在的内部研究支付。根据我们自己的广泛工作，我们认为，这些变化将鼓励更多的竞争和更广泛的服务，覆盖，价格结构和分配模式。“

Wheatley强调FCA不会萎靡不振。“我们最近的讨论文件邀请了关于ESMA提案潜在影响的反馈，这将在明年由欧洲委员会最终确定新规则之前通知辩论，”他说。“在临时，我们不打算对U.K中的规则进行任何改变。”

折断剂对FCA进行故障，用于橡皮图夹具II，并无法粘在U.K.的兴趣。“FCA代表了U.K.的观点，”Wheatley回应。“我们在广泛的主题中享有eSMA及其成员的明确和建设性的对话。”

Yet another criticism concerns the fact that the proposal would apply to research on all types of investments, not just equities. Since fixed-income transactions are generally paid through the spread on the instruments, not via dealing commissions, it’s not clear how regulators want this research financed. TheFCA’s Discussion Paperplainly concedes, “We have not explored this issue in our current work.” Wheatley adds, “If ESMA’s proposals are implemented, then portfolio managers would need to consider how they pay for third-party nonequity research and may need to contract for this separately.”

While that might not comfort everybody, it’s important to note that neither the FCA nor ESMA is advocating an outright ban. “The proposal is for what you might describe as severe restrictions over the nature of the research services that could be purchased from dealing commissions,” stresses Daniel Godfrey, CEO of London’s Investment Management Association, an industry group. “What would be included and excluded in that is not clear.”

For instance, the proposal makes an exception for “minor nonmonetary benefits.” What exactly that means is unknown.

有些内部人士承认，研究采购有潜在的利益冲突。“资产经理有效地花费了别人的钱，”允许另一个伦敦的分析师就匿名的条件说话。“但解决方案应更加使用委员会分享安排，更好的披露和可能需要研究预算和经纪人评论，最佳资产经理已经拥有。”

CSAs divide trading commissions between the firm that provides execution and the one that furnishes research advice. “The CSA is kind of a nice halfway step to where you have price discovery and a better sense of exactly how much you’re paying to whom,” says the CIO of a large U.S.-based fund management firm. “It makes you price out the different parts in what looks like hard dollars.”

To the end investor, though, the total charges come as one bundled fee — and therein lies one of the regulators’ chief complaints. “If you were designing a system from scratch, there’s no way you would let people pay for research with commissions,” asserts Michael Mayhew, CEO ofIntegrity Research Associates，康涅狄格州Darien，基于康涅狄格州的咨询公司，报告了全球投资研究行业的趋势。“但这就是它的方式，并且已经改变它提出了各种问题。”

The cost of recalibrating payment processes alone could be crippling. “With unbundling, it will be harder for brokers to fund large research desks,” observes Richard Small, an attorney specializing in financial regulatory matters at the London offices of Davis Polk & Wardwell. “The counterargument has been raised, however, that investors currently pay for an oversupply of research with little value and that there is a constant demand for good research.”

如果资产管理人员必须从他们的利润和损失账户中进行研究，他们将只是购买少量。“这将损害买边和卖方，”梅霍夫说。他指出，如果大商店被迫将其研究费用分开了许多小型提供商已经做的，但他可以随着时间的推移而受益。“但在短期和中级术语中，中型和较小的公司将受到比大的大量的伤害，这是一个更多样化的收入基础和适应资源，”他说。

Another question concerns the appropriate pricing of research, notes Edward Wolfe, founder ofWolfe Research那a New York–based boutique and affiliated broker-dealer. He launched the firm in April 2008, after the demise of Bear Stearns Cos., where he had been a top-ranked analyst for years. (Wolfe was voted onto theAll-America Research Team11次空运&在1999年和2008年之间face Transportation and predecessor sectors, including eight appearances in first place, and has made the team five more times since then. His firm employs seven senior analysts, six of whom appear on this year’s team.) In some cases, he says, clients pay an up-front, prenegotiated quarterly amount. In others the asset manager decides at the end of the quarter how much a specific sell-side provider’s input was worth. “Their people take a vote internally,” the research director says. “Based on what percentage of the vote you garner, they award you a certain amount of money.”

毫不奇怪，这种善良的系统可以导致一些冲突。Wolfe对与基金经理播出的赎罪者异常公开，他认为已经进行了系统的决定，以远低于他们消费的研究资源的生产成本。因此，如果欧洲的建议让人们更公开地讨论研究价值，这可能对像他这样的公司有益。

Yet many asset managers may forgo independent providers in favor of a big-name firm that can offer access to the initial public offering calendar or other add-on services. “If they have to attribute the specific cost of research to the fund manager’s bottom line, that makes them more discriminating in terms of who they are willing to pay and how much,” says an analyst at基石宏，纽约的精品店。“当他们通过佣金支付时，他们往往会非常邋and，他们是关于他们的购买。”

Of course, no one can say for sure how asset managers will react. “It’s premature to conclude that clients who obtain research already will absolutely refuse to pay for the same research in any other way than the current model,” says the IMA’s Godfrey. “If research has value, will people not pay for it?”

同样，不仅要断言只有最大的公司可以调整。“没有人知道最好的适配员是谁，”他补充道。“我认为这不一定只是最大，最强，最快的最快。”

He believes that the emphasis should be on resolving potential conflicts of interest, not harping on so-called inducements. “There needs to be a different approach,” he contends, “which would involve a thorough and objective evaluation of the possible negative consequences around price formation, liquidity, capital raising for small caps — to look at those and see whether under a different model one could maintain the benefits of the current regime but also remove or minimize conflicts that exist.”

戈弗雷倡导基于广泛的方法。“拼图中有很多碎片，你需要确保你可以在没有注意到的情况下在没有失去一些重要的地方来重新排列它们，”他说。

BNP Paribas投资合作伙伴的股票和康沃尔州股票主管Frédéricsurry同意。“拟议的监管变化可能对我们的实践产生严重的意外后果，并最终为客户，”他预测。“如果我们必须直接支付研究，通过我们的宝洁，我们肯定会变得更加选择，我们的研究预算将下降。这将对我们的长期回报产生影响。如果您有更少的研究，您可以生成更少的想法 - 这意味着对客户的回报效果较少。“

Instead, Surry proposes a road map of common principles for tracking and evaluating research. It would include a detailed accounting of CSAs, with full disclosure and oversight. “To highlight how we value the research provided by brokers, that is very important,” he declares. “[But] research is not an inducement, as ESMA puts it. It is not a benefit to the asset manager himself — it is linked to the fund, to the strategy behind the investment process.”

He acknowledges that providing greater transparency may not be easy or come without cost. “It will mean more duties for us,” he says. Yet for Surry, research is too important to give up. “If you are based in Paris and want to cover emerging markets, say, you can’t do it alone,” he points out.

But that is precisely what Surry expects more firms will try to do. “The large asset managers that are able to maintain their own global in-house research will have a tremendous advantage,” he predicts. “Then brokers who specialize in small caps will face tremendous barriers and will not survive.”

Not everyone disagrees with ESMA and the FCA. Benn Steil, director of international economics at the Council on Foreign Relations, a foreign policy think tank headquartered in New York, argues the proposals fix a loophole in existing规定s。He believes asset managers are overpaying, which causes “a material drag” on fund holders’ returns. “If fund managers had to bear the costs themselves and then recoup them from clients transparently, the fund managers would quite naturally be far more diligent about pushing down those costs.”

然而，Steil不希望华尔街改变。“在美国，目前的安全港政权彻底根深蒂固，许多强大的既得利益都是为了保持这种方式，”他说。

其他观察者认为，监管框架的任何紧缩作为一种抗真鼻穴。“有足够的，合适的规定sin place already,” maintains Ron Geffner, a former SEC enforcement lawyer, currently director of the financial services group at New York law firm Sadis & Goldberg and a vice president of the Hedge Fund Association, an international industry trade group. “The real problem is, regulators have gotten too规定happy.”

投资者should already understand how their commission costs are being spent, he says. “If they don’t, they aren’t properly educated or aren’t reading the documents already required,” says Geffner. No amount of disclosure will force shareholders to be well informed. Anyway, he adds, regulators already have the authority to enforce fund managers’ fiduciary obligations.

Charles Trzcinka, a former senior economist with the SEC’s Office of Economic Analysis and now a finance professor at Indiana University, Bloomington’s Kelley School of Business, goes a step further. “This is a rule that solves an imaginary problem,” he says. “Market prices will be less efficient, which will hurt every investor. If the restrictions reduce the number of analysts, which will almost surely happen, investors will definitely be worse off.”

In the coming months, in preparation, financial institutions with international operations need to consider accommodating the different regions where they operate. “Many global investment firms currently operate trading and research platforms that are fully integrated to take advantage of economies of scale, for personnel reasons, and/or for operational alignment,” explains Dan Waters, former director of conduct risk at the FSA and now a a managing director at the ICI Global division of the Investment Company Institute, a mutual fund trade association, in London. Many have incurred “substantial costs” to expand worldwide, he adds, “anticipating that the global practice of using commissions to pay for research would remain consistent cross-border.”

To break up a unified payments system will be not only complicated but expensive. “Given the global nature of much of investment management, there are many different combinations of circumstances — the clients’ jurisdictions, the investment firms’ and their affiliates’ jurisdictions, and the trading jurisdiction,” says Waters. “The adoption of different European rules would cause significant operational complexity, increased compliance burdens and costs, with significant disruption to the efficient and effective provision of research across funds and clients at a global level.”

全球企业甚至可以在欧洲经营太昂贵，从国际投资者关闭区域，反之亦然。“最终结果将增加碎片，”他断言。

另一种抵押品成本涉及数据管理。宾夕法尼亚州SunGard金融系统韦恩韦恩的机构资产管理总裁道格摩根说：新的规定scould indeed be good for his information technology business. “To the extent that these changes align with technologies we’ve developed, we could build solutions to help our customers address the new scenario,” he says.

然后，新规则可能会限制预算。“如果您在更具竞争力的开放市场中开始定价研究，您可能会发现它在资产管理行业内部的进入障碍，”他注意到。

但最糟糕的情况似乎是当前的场景：不确定性的状态。摩根说：“我们只能在开发解决方案之前才能发展解决方案，”摩根说：“摩根说：”摩根说。“

Which raises the question: Have authorities simply not thought this thing through? “The regulators are just saying ‘transparency, transparency, transparency.’ But they’re not really focusing on what are the costs, costs, costs,” comments Mark Williams, a former bank examiner with the U.S. Federal Reserve, now a professor of finance at Boston University. “When regulators say, ‘You’ve got to account for your research spending,’ what they’re really saying is, ‘It’s going to cost you more to do business.’” • •