A survey commissioned by Peel Hunt, in partnership with Extel, reveals the unintended negative impact the proposed research payment changes within MiFID II will have on the UK Equity market.
85% of buy-side respondents fear a decrease in the number of analysts publishing on Small & Mid Cap companies. 74% believing the proposals will adversely hit liquidity of Small & Mid Cap stocks.
The survey consolidates significant representation of industry views and a clear illustration of the strength of feeling held by the asset management industry. The 161 professionals at the 137 asset management firms represent over £1.7 trillion of AUM; whilst the 69 quoted companies surveyed have a combined market cap of £1.6 trillion combined market capitalisation.
Steven Fine, Managing Partner, Peel Hunt commented: “The results of this survey highlight the serious concerns held by the companies and the investors over the unintended consequences these regulatory proposals are likely to have on UK Small & Mid Cap companies, investors, asset managers and brokers.”
“It is not an exaggeration to say that corporate boardrooms are largely unfamiliar with the machinations of financial services legislation therefore the impact of a reduction in research coverage and the subsequent knock-on effect on potential capital markets activity will likely be felt too late.”
To view a full copy of the report, please email [email protected]