Britain mirrors EU move to ease rules on broker research

© Reuters. FILE PHOTO: The logo of the new Financial Conduct Authority (FCA) is seen at the agency’s headquarters in the Canary Wharf business district of London April 1, 2013. REUTERS/Chris Helgren

By Huw Jones

LONDON (Reuters) – Banks will no longer have to itemise fees for reserch on smaller companies from March, Britain’s financial watchdog said on Tuesday in a bid to cut red tape on markets.

Under “MiFID” rules inherited from the European Union, which Britain left last year, banks and others who produce research on stock and bond picks, had to invoice their customers like asset managers separately from other services such as executing trades.

The aim was to help asset managers determine if they were getting value for money from research.

The Financial Conduct Authority (FCA) said on Tuesday that from March 2022, there will be an exemption from the rule for research on companies with a market capitalisation of below 200 million pounds, research on fixed income, currencies and commodities, and research from providers who do not execute trades.

“This should remove unnecessary regulation, make the requirements less complex and make these markets work better,” the FCA said in a statement.

The change aims to improve availability of research on smaller firms by allowing “bundling” of research and execution fees.

Other changes include relieving trading platforms and brokers from having to publish from Wednesday some reports on trade execution that don’t appear to benefit users, the FCA added.

The changes, put out to public consultation in April, mirror “quick fixes” already made by the EU to ease burdens on markets during the pandemic.

The finance ministry is due to set out proposals to help maintain the global competitiveness of Britain’s capital market after it was largely cut off from the EU due to Brexit.

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