Some 600 investment funds in Spain have taken on research costs associated with the implementation of Mifid II so far, which accounts for 35% of all Spanish funds.
The current figure has quadrupled year-on-year when just 150 Spanish funds announced they would absorb research costs at the time of the publication of the Mifid II transposition draft 12 months ago, according to the general director of Institutions at the Spanish National Securities Market Commission (CNMV) José María Marcos.
The Directive requires transparency around such costs, so that they can be identified and separated from transaction costs. Investors will know how much is being paid for research that they may use to make investment decisions.
For asset managers there is no explicitly prescribed option to follow, but they can choose themselves whether to demand customers pay the cost, or absorb it into their own balance sheet.
According to the MiFID II draft in Spain, the fund must meet certain requirements in order to assume the cost of the analysis: the analysis carried out must be translated into an original thought to the fund’s management, it has to offer some added value, and it needs to be associated to the fund’s investment policy.