LONDON (Reuters) - First State Stewart Asia, the Asian equities arm of First State Investments, said it will no longer bill the costs of broker research and advisory services to clients, as it prepares for the launch of new regulations in Europe.
Asset managers and brokers in the European Union are being forced to split up and price separately the services previously offered together with trade execution in a bundle that was then billed to the individual fund and its investors.
The move to ‘unbundle’ has already begun in Britain, but will apply across the EU from January 2018 under the impending Markets in Financial Instruments Directive II (MiFID II).
“First State Stewart Asia will compensate the providers of research by making separate payments directly from their own resources,” it said in a statement on Monday.
“This change reflects what we believe is in the best interests of the clients of First State Stewart Asia and will help to meet the requirements of the changing regulatory environment, in particular MiFID II.”
First State Stewart Asia is one of a small number of firms to confirm their intention to pay for research themselves, including Jupiter Fund Management (JUP.L) and M&G Investments, the funds arm of insurer Prudential (PRU.L).
First State Investments is rolling out its approach on a team-by-team basis, and would alert clients to any changes ahead of the MiFID II deadline of Jan. 3, 2018, a spokeswoman said.
Reporting by Simon Jessop; Editing by Greg Mahlich