Frost Webinar: MiFID II Client Research Budgets: Industry Inflection Point/Managing the Risks

The delivery of initial MiFID II Client Research Budget proposals by managers planning to use client money for research will be a defining moment in the industry.

The MiFID II research funding model, and associated policies are the most critical client/competitive positioning decisions facing asset managers in a generation.

Senior management will be responsible for the outcomes. Do your key MiFID II teams understand the implications of:

  • Creation of Strategy Budgets and appropriate top-line budget amounts (based on “research intensity”).
  • Research Valuation Methodology: Can Marketing/Client Service clearly explain to clients how the research budget was derived?
  • Multi-Asset Class cross-subsidization risks.
  • Likely asset owner perspectives/responses.
  • Global Implications.

What Senior Management must do now to avoid sub-optimal outcomes for firm profitability and competitive positioning.

Watch a recording of the webcast

Related Document:

MiFID II Research Budgets: Active Management’s “Big Bet”


Bloomberg Television Interviews with FCA CEO Andrew Bailey and Frost Principal Neil Scarth on MiFID II Research Issues

Watch now

Frost Consulting is a leading authority on the global investment research procurement value chain and related market structure/regulatory change. The rapid evolution of regulatory/ asset owner oversight of the research ecosystem has financial, operational and fiduciary implications for all market participants.

Frost assists a wide variety of clients in developing commercial and operational strategies to maximize revenue/alpha generation, optimize distribution and mitigate risk in a rapidly changing commercial environment.

Alpha Generation

Ontology-based semantic research management solutions.

Research Valuation

Models to develop asset-manager specific research valuation frameworks. FrostRB is a highly customizable Research/Valuation software platform that allows asset managers to construct multi-asset class research budgets to meet European regulation.

Research Payments

Post MiFID II, the only way for European managers to use commission to buy research will be via CSA funded Research Payment Accounts (RPAs). Managers with a limited CSA program will have to rapidly construct a CSA infrastructure to handle the vast majority of their equity trades. Frost is a market leader in integrated vendor-neutral CSA solutions.

MiFID II Research Process Diagnostic

“Audit” of the manager’s current research procurement process to assess preparation and likely compliance with MiFID II requirements.

Risk Mitigation

Regulatory/client reporting, CSA optimization.

Managing Regulatory Change

The origins of the current economic and regulatory model governing the institutional research business date back to the (US) Securities and Exchange Act of 1934. This venerable framework is on the cusp of transformative change. Frost helps asset managers, plan sponsors, banks and other market particpants understand and capitalize on regulatory change.

Frost Consulting is an active participant in industry and regulatory discussions on related issues.

Leveraging Applied Analysis

Frost employs proprietary customizable data/analytical tools to model the revenue, cost and ROI implications of various strategy options. These are combined with substantial experience with software vendors in related disciplines to create cost-effective solutions that deliver comparative advantage.

Our Services

Frost has specific solutions for: Asset Managers/Asset Owners Investment Banks/Brokers Research Content Producers Exchanges/MTFs Technology Companies

Sample Engagements

Get an idea of our work by taking a look at selected reference projects.