MIFID II: Assessing the Market for Investment Research One Year On

Since the introduction of MiFID II in January 2018, asset managers and investment banks have weathered a shakeout in the investment industry as investment firms seek to recalibrate their research needs under the new regime. Although MiFID II has brought transparency and competition to the investment research business, a Europe-wide survey by CFA Institute on the outcomes of MiFID II one year on paints a picture of reduced research budgets and rising concerns over a perceived reduction in research quality and coverage. With indications that buy-side firms are in-sourcing research, pressure is mounting on independent and sell-side research providers. The investment professionals surveyed cite decreases in the number of analyst jobs and a scaling back of research coverage, with the small- and mid-cap equity sectors affected mostSince the introduction of MiFID II in January 2018, asset managers and investment banks have weathered a shakeout in the investment industry as investment firms seek to recalibrate their research needs under the new regime. Although MiFID II has brought transparency and competition to the investment research business, a Europe-wide survey by CFA Institute on the outcomes of MiFID II one year on paints a picture of reduced research budgets and rising concerns over a perceived reduction in research quality and coverage. With indications that buy-side firms are in-sourcing research, pressure is mounting on independent and sell-side research providers. The investment professionals surveyed cite decreases in the number of analyst jobs and a scaling back of research coverage, with the small- and mid-cap equity sectors affected most.