Commcise and Convergex's Westminster Research Associates are to offer a fully integrated, technology-based solution that allows asset managers to be compliant with the upcoming MiFID II regulations relating to payment for research.
Westminster is a broker-dealer specialising in providing full-service custodial aggregation solutions and access to an extensive network of independent research to the institutional investment community.
Convergex is an agency-focused global brokerage and trading related services provider.
Due to come into effect on 3 January 2018, the MiFID II regulations will require investment managers to be far more rigorous in the way they manage their research spend.
In just over nine months from now, asset managers in Europe must be able to demonstrate, at a minimum that: all trade commissions are fully unbundled, such that no payments for research are being made alongside a trade (unless via a CSA arrangement); SA balances are being promptly swept into one or more ring-fenced Research Payment Accounts (RPAs); they have a clearly defined research budget, not linked to historic trading volumes, either at desk/strategy level or by fund; research funding is tracked against the research budget; a defensible research valuation model demonstrates that only substantive research has been paid for; and an end-to-end audit trail which clearly documents the entire process.
At the same time, to improve efficiencies and reduce operational costs, buy-side firms are looking for a single integrated solution that can handle all key aspects of commission sharing agreements (CSA) and research payment accounts (RPA). This includes trade reconciliation, invoice management, research budgeting, research evaluation, consumption tracking, payment processing, cash management, MiFID reporting and due diligence support.
The joint solution approach will allow buy-side and sell-side firms alike to benefit from a turn-key MiFID II-compliant system.
Amrish Ganatra (pictured), managing director at Commcise, says: "We are pleased to be working with Westminster Research Associates, which has a long pedigree of pioneering research aggregation services and a strong research network that will complement Commcise's offering. We believe asset managers are looking for a single integrated solution. By integrating our technology, technical and business expertise and experience, we will be able to offer clients a wider range of options."
Chris Tiscornia, CEO of Westminster Research Associates, says: "Commcise is an award-winning provider in this field, and we are delighted that Westminster can now offer clients extensive functionality for managing research payments. We expect this will open up many new opportunities for us, particularly in Europe, as we continue to prepare for the implementation of MiFID II."
