Corporate access practices are changing more rapidly in Europe, according to the CEO of corporate access provider Meetyl in an interview with IR Magazine. If European regulators follow through on a ban on using client commissions to pay for research, the corporate access market will undergo even faster reform.
Meetyl co-founder and CEO Jeffrey Tha said that European regulatory changes are providing a significant tailwind for the adoption of corporate access platforms. He expects global asset managers will adhere to UK and European policies and adopt the same practices in other regions such as the US and Asia.
Founded in 2012, Meetyl does not charge investors for its corporate access platform. The basic version is also free to corporates, with a premium version that adds analytics for IR departments. The firm was acquired by Glass Lewis in September 2014.
Our Take
There are at least a half dozen corporate access platforms seeking to disintermediate the investment banks, which up until now have had a lock on corporate access, which represents approximately one fourth of total research payments according to surveys by Greenwich Associates.
In addition to Meetyl, firms include WeConvene, Ingage, A2 Access (acquired by Dealogic in August), OpenExchange, CorporateAccessNetwork, and CorporateAccess.net.
The UK regulatory authority banned the use of client commissions to pay for corporate access in May 2014, prompting many to expect broad changes in how corporate access is conducted in the UK. However, investment banks restructured their corporate access offerings to make them eligible or partially eligible for payments with client commissions.
Like research generally, corporate access is an important adjunct to investment banking. For this reason, banks will continue to aggressively defend their position in corporate access despite the onslaught of new competition.
However, if European regulators ban the use of commissions to pay for research, investors will become far more open to new platforms.