Earlier this year, significant new rules relating to research became effective in the European Union (EU). In an effort to assist market participants regarding their U.S.-regulated activities as they engage in efforts to comply with the EU’s Markets in Financial Instruments Directive (MiFID II), the staff of the U.S. Securities and Exchange Commission issued three related no-action letters. One letter, from the SEC’s Division of Investment Management, provided temporary no-action assurances under the Investment Advisers Act of 1940 to broker-dealers that receive payments in hard dollars or through MiFID-governed research payment accounts from MiFID-affected clients. These assurances expire on July 3, 2020.
In the year since MiFID II became effective, broker-dealers, investment advisers, issuers and other market participants have had an opportunity to observe the effects of MiFID II’s research provisions. During this time, SEC staff has also been monitoring and assessing the impact on the research marketplace and affected participants, including investment advisers and broker-dealers. As part of this effort, SEC staff continues to conduct industry outreach and engage with other regulators, including European authorities.
“As the staff evaluates possible recommendations, it is invaluable to hear from a diverse group of market participants,” said SEC Chairman Jay Clayton. “In particular, it is important to have data and other information about how MiFID II's research provisions are affecting broker-dealers, investors and small, medium, and large issuers, including whether research availability has been adversely affected. Thank you to all who have been engaging with us on these issues.”
We continue to encourage members of the public to provide data and other information relating to the effects of MiFID II's research provisions.
Comments would be appreciated by Jan. 31, 2019 so that they can be of greatest value in the staff’s evaluation of possible recommendations. In particular, data and information covering the period from MiFID II’s implementation to a recent date would be particularly useful.
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