Esma published its final position on Corporate Access on the 4th of April. ESMA’s position clearly and definitively introduces the separation of Corporate Access and Research.
ESMA considers that it is up to the Asset Manager to determine whether the services offered to him by brokers are Minor Non Monetary Benefits (MNMB) or on the contrary if they constitute inducements. Under MiFID2, Asset Managers can not simply follow the brokers position. In other words, Asset Manager have to determine whether the service it received has any impact on its investment decisions. In this case, the service can not be considered an MNMB and can not be free. Moreover ESMA specified that this service should not be linked to Research in order to justify payment of the latter. In particular, it is important to note that ESMA highlighted the risks for potential conflicts of interest regarding the billing of Corporate Access and Research. A highly sensitive issue, as a Research Provider can not use the Corporate Access service as a free service or sell it at a price unrelated to the reality of the service in order to continue to sell its Research. Brokers can, of course, continue to offer Corporate Access, but this service will have to be subject to separate pricing and an audit trail like the research budget if paid through an RPA .
ESMA’s latest proposal covers the case of direct payment of Corporate Access by the Asset Manager with its own P&L. This solution is possible and thus avoid the potential problems of conflict of interest and the difficulties related to the budgeting of expenses related to this service.
ESMA position’s confirms the view that Corporate Access is a value-added service, important in the construction of Asset Managers investment decisions.
Corporate Access is on the verge of a real revolution with the need to define a transparent price for this service which will have to be completely separate from Research.
The emergence of alternative solutions for the organization of roadshows is now a reality!!
Corporate access is at the dawn of a revolution in which MyDCA is an innovative actor and an alternative to long lasting Broker domination.
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Laurent Dubois: firstname.lastname@example.org /:+33(1) 84 79 70 21