Royal Bank of Canada (RBC) and IHS Markit are to integrate Research Payment Account (RPA) services to offer asset managers a comprehensive solution for administering payments for investment research.
Under the new regulatory framework outlined in MiFID II, updated legislation setting out rules around commissions, inducements and conflicts of interest, come into force from January 3, 2018. Asset managers therefore need to start considering now how they will ensure compliance with provisions relating to the unbundling of research payments from trading commissions and the management of those payments.
IHS Markit is a specialist in critical information, analytics and solutions. Its new RPA Manager solution is an online platform that assists firms in adhering to MiFID II requirements, including research budget calculation, tracking and allocation, managing funding of the RPA through direct debit or commission sharing agreements, reconciliation, reporting and document management.
RBC is a global leading diversified financial services company that provides a focused set of products and services to corporations, institutional investors and governments around the world. RBC will leverage its CSA expertise, bank status and AA- credit rating to hold and administer individual, segregated accounts in the name of the buy-side firm.
Cooperation between RBC and IHS Markit will enable payments for research to be administered using RPA Manager from accounts maintained at RBC at the discretion of the individual firm in an efficient and timely fashion.
Managing Director (pictured), IHS Markit, says: “The wider market supports the importance of greater transparency around commissions and payments for research; however the operational and regulatory challenges of commission unbundling and fulfilment is a complicated endeavour that remains little understood. We are delighted to work with RBC to provide a wholly integrated, scalable and, more importantly, transparent, RPA solution.”
Graeme Pearson, Head of European Equities, RBC Capital Markets, says: “As the countdown to the MiFID II deadline intensifies, the industry needs to be ready from an operational perspective to ensure asset managers can put in place effective RPA solutions. IHS Markit has the proven technical capabilities to support the buy-side, while our specialist Research Payment Account team, which will be managed independently from our traditional brokerage offering, will ensure safe, efficient and timely processing of research payment obligations.”