To ask Her Majesty's Government what steps they are taking to reform the MiFID II market rules to help encourage analyst research for companies.
Answered on
22 February 2022
The MiFID II rules relating to research are set out in the Financial Conduct Authority (FCA)’s rules. They came into force in January 2018.
The FCA judge that these rules have brought benefits to end-investors by lowering charges and increasing the quality of execution services. However, the FCA also identified specific negative impacts for research on small and medium enterprises (SMEs). In December 2021 the FCA announced that they would change their rules to address this, by allowing investment firms to bundle brokerage and research fees for SMEs with a market capitalisation of below £200 million.
More broadly, the Government is reforming the MiFID II framework through its Wholesale Markets Review to deliver a framework that is fair, outcomes-based and supports openness and competitiveness, whilst maintaining the highest regulatory standards.