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NEWSLETTER: As the summer draws to a close, it’s nice to be experiencing the familiar ‘back to school’ feeling, which brings with it a sense of normalcy and embracing life after COVID-19.
The SEC recently announcing they would not extend a MiFID II related No Action Relief granted in 2018 also got me reminiscing this week.
When MiFID was introduced in Europe back in 2018, a potential conflict arose between managers subject to rules meeting MiFID’s research payment requirements and broker-dealers providing the research, triggering the obligation to register as an investment adviser under the arrangement.
With the expiration of this No Action Relief on June 30, 2023, broker-dealers providing research who comply with MiFID II will need to register as an investment adviser to continue accepting compensation. Alternatively, these broker-dealers can create a registered advisor affiliate to receive compensation. Firms in this scenario should begin considering which approach to take to this regulatory change.
We published an article on the topic when the no action letters were first published in 2017 and we’ll continue to keep a close eye on any further updates ahead of June next year.
Chief Executive Officer