Principal Global Investors (PGI) has selected Visible Alpha’s ONEaccess platform and ITG, a leading independent broker and financial technology provider, to introduce an enhanced process for managing equity broker and research evaluation and consumption.
The combination of these tools allows the firm to increase monitoring and transparency of their research processes creating additional efficiencies across their global equity products while also allowing the firm to meet their MiFID II requirements.
Through PGI’s engagement with Visible Alpha and ITG, the firm’s approximately 100 equity research professionals will be able to discover corporate access events, set up custom valuation frameworks for their interactions with brokers and research providers in a granular way, and oversee payment of these interactions in a seamless global workflow.
“Implementing a robust process for managing research consumption has been top-of-mind for us at Principal Global Investors long before the MiFID II regulatory guidelines were revealed,” says Jennifer Sadiq, Director of Equities at Principal Global Investors. “By partnering with ONEaccess and ITG, we feel confident about our ability to comply with MiFID II regulatory demands and implement a sustainable and transparent process for research consumption and valuation to best meet our client needs.”
The key elements of PGI’s enhanced research management and evaluation process include:
The ONEaccess Platform for Research Valuation: Empowers asset managers to monitor, aggregate and analyze all of their interactions with research providers in one place, ensuring that consumption is aligned with the firm’s research budgets. To facilitate the assessment of research quality, customisable research provider scorecards let firms assign weightings to valuable research services, build broker votes from the bottom-up using detailed consumption and value metrics, and then action payments to RPAs.
The ITG Research Payment Account (RPA): Enables asset managers with the flexibility to fund their RPA with either a CSA commission or a research charge alongside the execution in a manner that can be operationally similar to a traditional Commission Sharing Agreement (CSA). The ITG RPA can also be funded with a direct research charge to investors or from a firm’s own P&L. RPA accounts managed by ITG are held in a bank account in the name of the asset manager at one of several major global banks, segregated from brokers’ funds and controlled by the asset manager.
“Our team puts much rigour behind building sustainable technology solutions for investment professionals to maximize their time and understanding of the research they consume,” said Barbara Lee, Vice President of Sales at Visible Alpha. “We are pleased to partner with Principal Global Investors and ITG in order to not only meet, but exceed, the requirements of MiFID II.”
“ITG’s comprehensive RPA solution, working in collaboration with Visible Alpha, will enable Principal to address the challenges of MiFID II compliance and reporting, streamlining regulatory and administrative workflows and providing payment flexibility,” says Jack Pollina, Head of Global Commission Management at ITG.