Canadian regulators are not planning any rule changes to accommodate forthcoming changes in Europe, which will require the unbundling of research from brokerage commissions, says Canadian Securities Administrators (CSA) notice published Thursday.
The new MiFID II rules, which take effect in Europe in January 2018, will require investment firms to separate research from trading fees. This will put an end to the long-standing industry practice of buy-side firms paying for sell-side research through their commission allocations, and will instead require them to pay for research directly.
Firms that are changing their practices to comply with the new MiFID rules should also be able to comply with the existing Canadian rules in this area, the CSA notice says.
Following consultations with industry players, such as asset managers, dealers, and pension plans, along with other regulators, the CSA has concluded that, “the expected MiFID II unbundling requirements do not create an immediate need to amend the current regulatory regime in Canada.”
“We will continue to monitor developments relating to the MiFID II unbundling requirements and consider any further changes that may impact our current view,” the CSA says.