AIMA MiFID Survey: Uncertainty Abounds

Jun 21 2017 | 6:46pm ET

With the January 2018 deadline for MiFID II implementation only six months away, alternative asset managers are still uncertain about how the new regulations will impact them, according to a new survey from AIMA.

For example, more than one-third remains unclear on how they will be paying for research following MiFID II’s rollout, the survey of more than 50 alternative asset managers revealed. Of the two-thirds that have made decisions about how to pay for research, 80% plan to charge investors and the remaining 20% intend to absorb the costs themselves. 

Indeed, fund managers globally cited uncertainty around what the MiFID II rules mean, both their scope and substance, as their biggest MiFID-related challenge. Other areas of uncertainly include a perceived lack of clarity relating to the cost and nature of services provided by brokers. 

With MiFID II rules requiring firms to decide how they will report trades to the regulator and the market, the survey found that 75% of firms plan to self-report to their regulator. Meanwhile, 50% intend to delegate some of the responsibility to one or more brokers. The findings indicate that some investment management groups will not necessarily limit themselves to a single reporting mechanism.

When publishing details of executed trades to the market - which helps set market prices - 33% of alternative asset managers plan to self-report, while the remainder plan to have brokers report their trades.

Importantly, half of the respondents to AIMA’s survey that have offices outside of the EU said they intend to apply MiFID II’s best execution policies globally, a figure which jumps to 90%for alternative asset management firms that delegate portfolio management from the EU to a third country.

“Complying with MiFID II is a significant undertaking and understandably many members are needing to rely on the broker community to provide solutions,” said Jack Inglis, AIMA’s CEO, in a statement. “This survey shows not only that a substantial amount of uncertainty remains, but also that the industry is working hard to meet the January 2018 deadline.” 

The full survey is available to AIMA members, the statement added.

AIMA is a global alternative investment industry association with 1,800+ corporate members in more than 50 countries. It is the co-founder of the well-known Chartered Alternative Investment Analyst designation, and its manager members collectively manage more than $1.8 trillion in assets worldwide. 

In Depth

AIMA: Smaller Firms Remain the Lifeblood of the Hedge Fund Industry

Jul 26 2017 | 5:55pm ET

It is a hedge fund industry truism that the largest managers receive the most attention...


CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Rastegar: PE Real Estate Gains Momentum as Uncertainty Rises

Jul 21 2017 | 6:04pm ET

The steady march of equity markets and fundamental shift in the direction of Fed...


From the current issue of