LONDON Emerging markets-focused financial services firm Exotix said on Thursday it is "unbundling" its research and data services from the broking and investment banking divisions ahead of the upcoming regulatory overhaul of the securities trading industry.
Exotix, part-owned by Michael Spencer, founder of interdealer broker ICAP , said it is launching a standalone research, analytics and data division (RAD) to help European clients prepare for MiFID II - Markets in Financial Instruments Directive - regulation that takes effect in January.
One aspect of the new regulation is that investment banks must charge fund managers an explicit fee for research rather than bundling the cost into trading commissions charged to clients, as is the case at present.
That is forcing many asset managers with European operations to "unbundle" or separate trading costs from research costs when they pay brokers.
"Positioning research, analytics and data as a standalone unit marks an important step in helping European clients prepare for regulatory changes to the way in which research is consumed under the impending MiFID II rules," Exotix said in a statement.
MiFID could benefit some independent research houses if big investment banks are no longer able to employ scores of analysts to produce research.
Exotix said it would show how research could "also be used as an enhanced separate service".
Now rebranded as Exotix Capital, the company's RAD service, covering over 160 companies and government entities, is to be offered on a research portal that will initially be delivered on its own website.
But analyst reports could later also be made available on third-party platforms, it added.
The company has recently made a string of hires aimed at boosting its equity and fixed income operations in Asia, Africa and Middle East. It said the RAD division would be headed by Paul Domjan, formerly the chief executive of financial analysis firm 4CAST-RGE (Roubini Global Economics).
(Reporting by Sujata Rao Editing by Jeremy Gaunt.)