Forefront Communications

Fund Operations: Vendors Field Increased Mifid II-Compliance Requests from US Fund Groups


Sam Belden

Sam Belden

Cloud-based technology firm TORA is expanding its offerings to help fund groups comply with the EU-based updated Markets in Financial Instruments Directive, most recently leveraging NEX Regulatory Reporting as an approved reporting mechanism across its OEMS platform.

TORA is increasingly fielding requests from US fund clients to expand their Mifid II offerings around trading and best execution, according to David Tattan, head of European business development at the firm.

Although Mifid II came into effect for fund groups across the EU, and those with EU business arms and employees, on Jan. 3, pressure from investors has forced some US fund groups to strive for a higher degree of compliance, in turn pushing third-party vendors to up the ante on their offerings.

“All of it is completely client-driven,” Tattan said of the firm’s expansion over the last nine months. “We’re adding partnerships and functionality into the ecosystem to help clients streamline operations.”

Best execution, unbundled research fees and transaction reporting are three critical areas that fund vendors are fielding interest in under the directive, even for fund groups that fall outside of the directive’s jurisdiction.

Demand for unbundled research fees – a transparency initiative where funds are required to separate and valuate the cost of individual pieces of research that lead to investments, and separate those price tags from commission dollars also known as soft dollars – is a large component of Mifid II that firms are struggling with, according to a July study from consulting firm Tabb Group. A shift toward unbundled research is impacting research providers, with new research models and platforms cropping up to fulfill funds’ needs, including today’s launch of centralized investment research platform Nucleus195.

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