Instinet has launched RQ Connect (Research Quality Connect), a provider-neutral application within its research payment and commission management platform, Plazma.
RQ Connect enables research procurement management (RPM) systems to transfer research quality assessment data to Plazma. Investment managers can review, edit and confirm this information on their desktop, and seamlessly authorise payments, notably through Instinet Europe’s certified Payment Institution license in Europe.
RQ Connect unifies outside evaluation and budgeting processes with the established payment processes of Plazma.
“Instinet is committed to innovating and adding value for clients, which means giving them options. RQ Connect offers clients the flexibility and optionality to choose which research management tools best suit their needs,” says Patrick Gill, head of commission management for Instinet Europe.
A provider-neutral hub for MiFID II research payments, Instinet Europe was authorised by the Financial Conduct Authority (FCA) as a Payment Institution in August 2015. This registration enables the firm to actively manage research payments on behalf of clients in a way that prepares the parties for the expected MiFID II framework. Instinet’s Research Payment Account (RPA) based models incorporate a regulated ‘safeguarding’ of cash balances, which is anticipated to be a core requirement of MiFID II in Europe.
Instinet’s Plazma platform supports client commission credit (soft dollar) and commission sharing accounts for North American and Asia-Pacific clients who accrue credits in accordance with applicable local regulations.
“Creating open access to Plazma on a vendor-neutral basis solves workflow challenges the buyside faces as they construct their MiFID II response strategy. RQ Connect allows our clients to choose the research management tools best suited to their needs, and plug into Instinet’s global research payment capabilities,” says Luke Mauro (pictured), global head of operations, Instinet Incorporated. “Instinet is uniquely able to do this as an agency model firm and an innovator in the research payment space.”
In April 2017, Integrity Research released a report on MiFID II Research Solution Providers. Michael Mayhew, founder of Integrity, says: “We analysed 10 firms that currently provide or are developing research solutions for asset managers subject to MiFID II proposed rules. Instinet offered the most comprehensive commission management and RPA administration solution we reviewed.”
A number of third party firms are already integrating their data feeds into RQ Connect, including Alphametry, Castine, Commcise, CorpAxe, Dealogic, FactSet, ResearchPool, RSRCHXchange and Visible Alpha/ONEaccess.
Vicky Sanders, co-founder, RSRCHXchange, says: “Instinet is one of the RPA managers connected to our RSRCHX platform. The collaboration between RSRCHXchange and Instinet enables asset managers to purchase research subscriptions or buy individual reports from hundreds of providers. The process of research procurement is now simpler and less intensive; asset managers can now manage budgets and make payments via Instinet while discovering, reading and purchasing research via RSRCHX in a MiFID II compliant way.”
Instinet expects to further expand the list of connected providers over the course of the next few months.