EU MiFID II/MiFIR Consultation - Seeking Feedback on Research Unbundling/SME Questions
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April 27, 2020 TO: ICI Global EU Capital Markets Union Task ForceICI Global Regulated Funds Committee
ICI Global Trading & Markets Committee RE: EU MiFID II/MiFIR Consultation - Seeking Feedback on Research Unbundling/SME Questions
As we previously informed you, on February 17, 2020, the European Commission launched a consultation on the review of the MiFID II/MiFIR regulatory framework, with comments due originally by April 20, but subsequently extended to May 18 (Consultation).[1] The wide-ranging consultation covers a broad spectrum of issues and concerns that have arisen since MiFID II/MiFIR went into effect over two years ago. We held a member call on March 4 to brief members on the content of the Consultation and to begin gathering member feedback on the various aspects that may be of interest to members. More recently, on April 23, we held a call focused on the investor protection aspects of the Consultation.
Section III of the Consultation seeks input on the rules on the unbundling of research and execution services that were introduced in MiFID II/MiFIR (Questions 58-68.1). The Commission states that research coverage relating to small and medium enterprises (SMEs) seems to be suffering an overall decline and asks various questions regarding what can be done to increase its production, facilitate its dissemination and improve its quality, including by amending the rules applicable to issuer-sponsored research. We have thus far received very limited feedback on this section and would like to provide members an additional opportunity to share their views with us so that we may formulate a response on these issues if there is member interest in us doing so.
Attached to this memorandum are the relevant questions on research unbundling and SME research. If your firm has a position on the questions raised, please provide feedback to me however most convenient – you can fill out the document with your responses (you do not need to respond to all the questions), or reach out to me by email (emykolenko@ici.org) and we can set up a time to talk by phone.
Please provide your feedback or reach out to me by the end of Friday, May 1.
Eva M. Mykolenko
Associate Chief Counsel - Securities Regulation
endnotes
[1] The consultation is available at https://ec.europa.eu/info/sites/info/files/business_economy_euro/banking_and_finance/documents/2020-mifid-2-mifir-review-consultation-document_en.pdf.