AIMA MiFID Survey: Uncertainty Abounds

Jun 21 2017 | 6:46pm ET

With the January 2018 deadline for MiFID II implementation only six months away, alternative asset managers are still uncertain about how the new regulations will impact them, according to a new survey from AIMA.

For example, more than one-third remains unclear on how they will be paying for research following MiFID II’s rollout, the survey of more than 50 alternative asset managers revealed. Of the two-thirds that have made decisions about how to pay for research, 80% plan to charge investors and the remaining 20% intend to absorb the costs themselves. 

Indeed, fund managers globally cited uncertainty around what the MiFID II rules mean, both their scope and substance, as their biggest MiFID-related challenge. Other areas of uncertainly include a perceived lack of clarity relating to the cost and nature of services provided by brokers. 

With MiFID II rules requiring firms to decide how they will report trades to the regulator and the market, the survey found that 75% of firms plan to self-report to their regulator. Meanwhile, 50% intend to delegate some of the responsibility to one or more brokers. The findings indicate that some investment management groups will not necessarily limit themselves to a single reporting mechanism.

When publishing details of executed trades to the market - which helps set market prices - 33% of alternative asset managers plan to self-report, while the remainder plan to have brokers report their trades.

Importantly, half of the respondents to AIMA’s survey that have offices outside of the EU said they intend to apply MiFID II’s best execution policies globally, a figure which jumps to 90%for alternative asset management firms that delegate portfolio management from the EU to a third country.

“Complying with MiFID II is a significant undertaking and understandably many members are needing to rely on the broker community to provide solutions,” said Jack Inglis, AIMA’s CEO, in a statement. “This survey shows not only that a substantial amount of uncertainty remains, but also that the industry is working hard to meet the January 2018 deadline.” 

The full survey is available to AIMA members, the statement added.

AIMA is a global alternative investment industry association with 1,800+ corporate members in more than 50 countries. It is the co-founder of the well-known Chartered Alternative Investment Analyst designation, and its manager members collectively manage more than $1.8 trillion in assets worldwide. 

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