Previously, the debate over payments for research has concerned only asset managers and external research providers.
Now the FCA has said content produced by those taking orders on trades and advising clients on trends and markets could also count as research under the new rules.
According to the Financial Times on Monday, “multiple sources” said an FCA official told an industry conference that a trader providing “substantive” insight or analysis would need to be paid for research to avoid it being classed as an inducement.
An unnamed broker chief executive told the paper: “Research departments give a structured output that you can price, but this will be extremely hard to monitor and police.”
Mifid II, a set of European regulation coming into effect from 3 January next year, means all payments for research must be charged as a separate cost rather than combined with a clients’ final charge in a process known as unbundling.
A number of asset managers have confirmed they will absorb the cost of external research post-Mifid rather than pass it on to the end client as a separate cost.