No Action on No-Action: What Happens if SEC Research Payment No-Action Expires?
While MiFID II is a European mandate, it has driven global buy-side firms to attempt to unbundle their research bills in the US and beyond. But even if large US brokers were willing to change their business models and unbundle research and execution, most are prohibited from receiving direct hard dollars for research unless they register as investment advisors, which comes with additional rules and compliance challenges. This leaves US buy-side firms looking to unbundle in a quandary, as they may not be able to pay their US brokers. In this exclusive report, TABB Group founder and research chairman Larry Tabb looks at the SEC’s possible solutions and the challenges to each approach.