The report and recommendations of the UK Investment Research Review were published on July 10, 2023. The recommendations have been accepted by the government and the Financial Conduct Authority has committed to prioritizing consulting on proposed rule changes with a view to revised rules applying in H1 2024.
There are seven key recommendations:
In our client note "MiFID II and the US Investment Adviser Regime", we discuss the impact of the EU and U.K. rules on unbundling of research on U.S. broker-dealers, particularly in light of the end on July 3, 2023 of the temporary relief given by the Staff of the Securities Exchange Commission that allowed U.S. brokers to provide execution and research services on a MiFID II-compliant basis without being regulated as an investment adviser. A more flexible U.K. approach to the unbundling research requirements would alleviate these constraints.
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