Policy
The regulatory environment for the provision and payment of equity research continues to evolve rapidly in Continental Europe while it has stabilized in the UK and the US. There are four sub-sections in the section for the UK, US, France and the EU, with background and papers on the respective regulatory changes.
The highest profile regulatory change impacting independent research firms and their investment management clients was the "unbundling" of commissions for execution and research in the UK. From 1 January 2006, investment managers had to separately disclose to end clients their spending on execution and research.
A more recent regulatory focus has been on the use of research commissions to pay for "corporate access" arranged by the investment banks. Euro IRP has met with the FSA to discuss this on a number of occasions. The FSA has issued a letter to the CEOs of UK regulated buy-side firms asking them to review their policies on corporate access as well as on other potential conflicts of interest in the research procurement process. Euro IRP is closely monitoring the impact this is having on the research market.