SEC Said Providing a MiFID Reprieve to Wall Street

The transcript discusses the ongoing dialogue between US and European regulators regarding research unbundling under MiFID II. The SEC has been lobbied to issue no action letters, allowing firms to comply with MiFID II without facing legal repercussions in the US. This move is seen as a significant milestone, though questions remain about its impact on research quality and pricing. The debate continues on whether research costs will rise or fall and how these changes will affect both buy and sell sides.

What is the main advantage for US banks discussed in the first section?

• They benefit from SEC's lobbying efforts.

• They can charge more for research.

• They have less regulatory oversight.

• They have better access to European markets.

What is a key conflict between US regulations and MiFID II?

• US firms must register as investment advisors if they charge for research separately.

• MiFID II requires US firms to lower their research fees.

• US regulations prohibit any form of research unbundling.

• MiFID II mandates US firms to merge with European firms.

What is the SEC's proposed solution to the conflict with MiFID II?

• To enforce stricter regulations on US firms.

• To issue no action letters exempting firms from certain regulations.

• To collaborate with European regulators for a unified policy.

• To increase the registration fees for investment advisors.

What is a concern regarding the cost of research as discussed in the final section?

• There might be a race to the bottom on research prices.

• Research costs might become too high for small firms.

• Research will become free for all clients.

• Research costs will be standardized across all firms.

What is one potential outcome of the new regulations on research quality?

• Research quality will be regulated by the SEC.

• Research quality might improve as firms compete on quality.

• Research quality will decrease due to cost-cutting.

• Research quality will remain unchanged.