European Commission U-turns on Mifid II unbundling rules


The European Commission has U-turned on rules around unbundling research and trading costs under Mifid II regulation, according to reports.

A document from the European Commission has proposed more relaxed rules around commission sharing agreements, which were previously going to be banned in favour of full unbundling of costs, reports Reuters.

European regulators had previously proposed that research and trading costs be separated to make it clearer for investors what they are paying for.

Currently commission sharing agreements pay a broker for trading shares, with a portion of that being allocated to pay for research given to asset managers.

However, the new document, seen by Reuters, suggests commission sharing agreements could continue, as long as the costs for each element are clearly laid out.

The document says: “Every operational arrangement for the collection of client research charge, where it is not collected separately but alongside a transaction commission, has to indicate a separately identifiable research charge.”

The document is not the finalised version and could still change.

The news comes after it was revealed that the implementation date for Mifid II is likely to be delayed by a year.

European parliamentarians agreed not to block any requests from regulators or ministers pushing for a delay from the original January 2017 implementation date to January 2018.