MiFID II is a European-born regulation that was created to make public markets more equitable, transparent and efficient. It does this by unbundling costs of resources provided by investment banks (research, access, deals) from trading commissions. It has global implications and is quickly being adopted as the global standard. Asset managers recognize that better transparency is better for business, and more fair markets are better for everyone. In summary, it’s a big change with widespread consequences for all public market stakeholders.
Research coverage and service levels across market caps, geographies and industries will experience a significant decline as a result of the buy side reducing their spend on research. Many reports forecast a decline in research coverage of 20-30%. The largest impact will be felt by small and mid cap companies, as investors are less willing to explicitly pay for research coverage of these companies. Liquidity, shareholder diversification and overall investor awareness will suffer and put more pressure on companies to manage their own investor relations programs.
Irwin was specifically designed to overcome the challenges set out by MiFID II, as well as those that are inherent in the traditional broker-dealer model. We combine our elegant and easy to use technology and powerful targeting algorithms, with first-class service to uncover new, differentiated investors. Irwin enables users to be proactive in staying on top of shifts in the market and to develop a stable, long-term investor base.
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