14 December 2017
Frankfurt
Reporter: Zsuzsa Szabo

SMEs to face new research costs under MIFID II


The overhaul of research services brought on by the second Markets in Financial Instruments Directive (MiFID II) will hit the pockets of small-and-medium enterprises (SMEs) hardest, according to an industry study.

In order to continue to attract the attention on the capital market in the future, "smaller issuers in particular will need to act", concluded the report, which was issued by Deutsche Boerse, the German Investment Funds Association (BVI), the German Share Institute, the German Investor Relations Association, and the German Society of Investment Analysts and Asset Managers.

Crucially, research services for SMEs will no longer be free of charge when MiFID II comes into force on 3 January 2018.

Market participants expect the new rules are to reduce the demand for research among larger market participants, while SMEs will need to purchase research to a greater extent.

The study also suggested that issuers should undertake more effort themselves to ensure that their securities are analysed.

Thomas Richter, CEO at BVI, said: “MiFID II will change quality of research. Investors will consider more carefully in future which analyses are good and how much they want to pay. Small and medium-sized issuers will then have to make an effort to stay on the radar.”

Renata Bandov, head of listing at Deutsche Boerse, added: „We already considered that smaller and medium-sized enterprises in particular will face challenges when we were developing our SME segment Scale.”

“That is why we decided that all Scale issuers will receive mandatory research that we commission as the stock exchange. The reports ensure more transparency and visibility for investors.”

More news
The latest news from Securities Lending Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
IHS Markit names Stuart Cornock as associate sales director
22 January 2018 | London | Reporter: Zsuzsa Szabo
Cornock has moved from Clearstream to IHS Markit
New York Fed confirms repo rate complaints
22 January 2018 | New York | Reporter: Zsuzsa Szabo
An audit of the Federal Reserve Bank of New York uncovered that the effective federal funds rate and overnight bank funding rate are in compliance with principles for financial benchmarks
James Burron has left AIMA
22 January 2018 | Toronto | Reporter: Jenna Lomax
James Burron has left the Alternative Investment Management Association
Hong Kong securities and derivatives markets break records in 2017
19 January 2018 | Hong Kong | Reporter: Jenna Lomax
Market capitalisation of Hong Kong’s securities market reached over $33 billion, while in the derivatives market total options trading reached over 137 thousand contracts
ESMA updates MiFID II transparency calculations
19 January 2018 | Paris | Reporter: Zsuzsa Szabo
ESMA has revised its transitional transparency calculations for equity and bond instruments reported under MiFID II
S&P reaffirms OCC’s AA+ rating
19 January 2018 | Chicago | Reporter: Jenna Lomax
S&P has reaffirmed OCC’s financial strength rating of “AA+/stable”
Clearstream to include Kazakh government bonds
19 January 2018 | Astana | Reporter: Zsuzsa Szabo
Kazakhstan treasury bonds are to be available through Clearstream