K. Susan Grafton
Washington, D.C. +1 202 261 3399
New York +1 212 698 3611
Following the Jan. 3 effective date of the EU’s Markets in Financial Instruments Directive II, some fund boards are reviewing managers’ responses to the new requirements.
MiFID II is legislation that impacts the ability of asset managers with a physical presence or domicile in the EU to receive and pay for research provided by investment banks, brokers and independent research providers. Specifically, MiFID II bans EU investment managers from accepting and retaining inducements (i.e., fees, commissions or monetary or non-monetary benefits) from third parties relating to their provision of portfolio management services to clients. As a result, investment advisers subject to MiFID II can no longer receive research through soft dollar arrangements.