Corporate access: a MiFID 2 Sideshow That Might Yet Cause a Headache for Asset Managers
Brokers provide asset managers with trade execution and corporate access. The latter comprises meetings between executives of listed corporate and institutional investors, mostly in the form of so-called non-deal roadshows. Many investment professionals consider these meetings to be a crucial part of their investment process.
Hitherto asset managers paid the brokers for all these services via a ‘bundled’ fee for trades. The trading costs are directly charged to the funds, i.e. paid directly out of the assets of the investors. The sums involved here are significant.
MiFID 2, applicable as of January 2018, generally aims for increased transparency and improved consumer protection. Part of this is a massive push for unbundling, whereby asset managers have to pay separately for trading, research and corporate access. The rules with respect to corporate access are, however, still somewhat murky.
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