Integrity Research Releases Review of MiFID II Research Unbundling Vendors


Integrity Research Associates LLC today released a major new study of MiFID II  Research Solution Providers which offers in-depth reviews of the tools being offered asset managers to implement the new research unbundling regulations under MiFID II.  The 150-page report details the vendors offering solutions for the new research governance and payment processes required by the new regulation, along with comparative analysis and suggestions for which vendors might be most appropriate under differing client requirements.

Despite efforts by UK regulators to ban the practice, MiFID II permits asset managers to continue to fund research payments using client assets, provided various governance and payment strictures are followed.  A variety of vendors have launched applications designed to assist asset managers in implementing these new requirements.

“Regulators will be requiring asset managers—including US investment managers with European operations—to adopt various practices to reduce the conflicts of paying for research with client assets as of January 3, 2018,” said study author Michael Mayhew, founder of Integrity Research.  “We decided to help managers by reviewing the available third-party options.”

Integrity Research identified two types of vendors offering MiFID II unbundling solutions. Research Procurement Solution providers (RPS providers) are FinTech software providers firms typically with experience offering commission management systems.  Included in the report are in-depth reviews of the relevant offerings from UK-based Commcise and FrostRB, and US-based Castine Consulting and Investars.

The second type of vendors are those offering to administer research payment accounts (RPAs) required under MiFID II for asset managers funding research payments with client assets.  RPA Administrators reviewed in the report include Bloomberg Tradebook, IHS Markit, Instinet, ITG, Liquidnet, and Westminster Research Associates/Convergex (now part of Cowen Group).

“We began our process last year by meeting with asset managers in the US and Europe to ask them what factors they felt were most important in their selection of research procurement vendors and the questions they would ask these providers,” said report co-author Carol Hanson, formerly a commission management professional at Bank of America Merrill Lynch.  “The buy-side inputs were invaluable in helping us structure the reviews.”

During the 4th quarter of 2016 and 1st quarter of 2017, Integrity Research participated in demonstrations of the solutions offered by each of the vendors, which were then followed up with data requests which enabled detailed vendor profiles and comparative analysis across the various applications.  The process was supplemented by interviews with buy-side references provided by vendors.

“While we were surprised to discover the number of vendors which had jumped into the market to help facilitate asset managers’ adoption of the new research unbundling requirements, we expect this marketplace could expand even further as regulators provide more clarity surrounding the final MiFID II rules,” said Mr. Mayhew.

To learn more about the study, go to

Our Take

Our review of MiFID II research solution vendors helped us better appreciate the implementation challenges facing asset managers adopting the new research unbundling rules.  One major issue is the conflicts between the new EU rules and US regulation, which we detail in the report.

More broadly, the proliferation of vendors facilitating the new research procurement requirements reflects a broad market response to the new regulation.


About Author

Sandy Bragg is a principal at Integrity Research Associates. He has over thirty years experience as an investment research professional. Prior to joining Integrity in 2006, he was an Executive Managing Director at Standard & Poors, managing S&P’s equity research business and fund information properties. Sandy has an MBA from New York University and BA from Williams College. Email:

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