New Models for Funding and Managing Investment Research

The administrative burdens of proposed MiFID II requirements regarding investment research may be the tipping point for managers to shift away from current practices and pay for research on their own. In this research, we will examine best practices for managing investment research and developing a successful governance framework under regulatory requirements.

At the time of writing, MiFID II Delegated Acts remain in draft form and proposals regarding allowable methods and practices for funding investment research continue to shift. Our best practice governance framework takes into account current expectations; however, the final version of MiFID II may require adjustments to these practices.

This research is a continuation of Investit’s focus on the front office and regulation.

Goals

Our research on New Models for Funding and Managing Investment Research focuses on the following goals:

  • Evaluate options for paying for research under new regulatory requirements
  • Identify best practices for developing research funding processes and controls
  • Share insights on methodologies for budgeting research spend, paying for research, demonstrating the value of research and tracking its impact on investment decisions

Scope

This research will focus on the following areas:

  • Identify leading practices for managing the research process under regulatory requirements
  • Examine the decision process for determining the types of research a firm needs to support its investment strategies
  • Evaluate the various options for sourcing research and provide methodologies for determining the best approach based on the firm’s research needs
  • Evaluate managers’ appetite for paying for research on their own vs. using client money
  • Identify elements of a comprehensive research commission policy
  • Specify how to design an effective investment research governance structure
  • Review third party solutions for budgeting and paying for research and managing internal and external research assets