The return of joint-payment models under MiFID II reforms redefines research funding in Europe, posing operational challenges and governance questions for asset managers, amid evolving research landscapes and cross-border implications.
Europe’s research-payment regime has entered a new phase with the return of joint-payment arrangements under MiFID II reforms that took effect on 6 June 2026, giving asset managers more scope to pay for execution and external research together once again. The shift marks a partial reversal of the strict unbundling model introduced in 2018, but it also revives a familiar question: whether firms can rebuild the controls needed to use combined payments without slipping back into the opacity the rules were meant to eliminate.
Under the original MiFID II framework, investment managers had to separate research from trading costs, paying for third-party research either from their own balance sheet or through a formal research payment account. The UK’s Financial Conduct Authority said in 2019 that the rules had improved accountability and cost transparency for investors, while also helping to expose the true price of research that had previously been hidden inside commission. Academic work since then has painted a more mixed picture, with studies finding that explicit payment structures reduced analyst coverage in parts of Europe and did not clearly improve fund performance for investors.
The reintroduction of joint payments matters because the practical machinery around commission funding was allowed to atrophy in many firms after years of unbundling. Speaking to RegTech Insight, Jeff Galvez, global head of commission management at Liquidnet, said the market had seen research budgets shrink after firms shifted to paying from profit and loss accounts in 2018, and that some providers had left the market as a result. He said that reduced diversity in research could ultimately affect performance.
The new regime is therefore as much an operational challenge as a policy change. Firms now need to identify what counts as research, set and justify budgets, allocate costs across funds and clients, and preserve an audit trail that shows how payments were approved and monitored. That requires tighter coordination between portfolio managers, traders, compliance teams, finance, operations and client reporting functions.
It also raises a broader definitional issue. Traditional broker research remains important, but the research chain now includes independent providers, specialist datasets, analytics platforms and AI-supported tools. Galvez said bulge-bracket brokers still play a major role in the payment process, but that the provider base has widened as new forms of research have emerged.
That expansion complicates governance. Firms must decide whether a service is genuinely research, or whether it is better classified as market data, technology or workflow support. The distinction matters because only certain costs should sit within commission-funded arrangements, and the line is becoming harder to draw as AI tools increasingly shape investment decisions.
The European changes also have a cross-border dimension. A 2024 study on MiFID II’s impact on global asset managers found signs that US funds increased brokerage commissions to help subsidise European business, suggesting the original rules encouraged regulatory arbitrage. In that context, the return of joint payments may make it easier for global firms to run more consistent research-payment programmes across jurisdictions.
For the buy side, the attraction is obvious: greater flexibility, less friction and a payment model that more closely matches how trading and research are actually consumed. But the test now is whether firms can combine that flexibility with the discipline MiFID II forced into the market in the first place. The outcome will depend on whether managers can prove that costs are visible, allocations are fair and governance is strong enough to satisfy regulators and clients alike.
- https://a-teaminsight.com/blog/mifid-ii-research-reforms-put-joint-payments-back-on-the-buy-side-agenda/?brand=rti – Please view link – unable to able to access data
- https://www.fca.org.uk/news/press-releases/fca-finds-mifid-ii-research-unbundling-rules-working-well-investors – In September 2019, the UK’s Financial Conduct Authority (FCA) published findings indicating that the MiFID II research unbundling rules have improved asset managers’ accountability over costs, saving millions for investors. The reforms, implemented on 3 January 2018, required asset managers to pay for research separately from execution services, enhancing transparency and reducing conflicts of interest. Prior to MiFID II, research costs were often bundled into transaction fees, making it difficult for investors to assess the true cost of research services. The FCA’s review found that the unbundling rules have been effective in promoting better cost transparency and accountability within the industry.
- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4759814 – A 2024 study titled ‘MiFID II Research Unbundling: Cross-border Impact on Asset Managers’ examines the effects of MiFID II’s unbundling requirement on global asset managers. The research suggests that U.S. funds have increased brokerage commissions to subsidize their European counterparts, engaging in regulatory arbitrage. This indicates that while MiFID II aims to enhance transparency and reduce conflicts of interest, it may also lead to unintended cross-border financial adjustments as firms seek to navigate differing regulatory environments.
- https://www.sciencedirect.com/science/article/pii/S1057521921001265 – A 2021 study published in the International Review of Financial Analysis investigates the impact of MiFID II’s research unbundling on market quality, focusing on stock liquidity and price efficiency. The findings indicate that explicit research payments are associated with a reduction in analyst coverage in the EU, particularly for large-cap stocks. Additionally, stock liquidity decreases for micro-cap stocks, while no significant change in price efficiency is observed. The study suggests that prior to MiFID II, there was an overproduction of research in Europe, leading to excess coverage.
- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3892441 – A 2021 study titled ‘Do Investors Benefit From MiFID II Unbundling?’ examines the implications of MiFID II’s unbundling of research and execution costs on fund investors. Using data from Sweden, the study finds no significant effect of unbundling on commissions. For more active funds, costs increased in relative terms. The research also finds no evidence that increased transparency in observing execution and research costs led to improved fund performance or better information for investors’ fund selection processes. Overall, the study suggests that investors did not significantly benefit from the unbundling of commissions.
- https://www.sciencedirect.com/science/article/pii/S0929119924000774 – A 2024 study published in the Journal of Corporate Finance titled ‘Do investors benefit from MiFID II unbundling?’ examines the impact of MiFID II’s unbundling of research and execution costs on fund investors. The study finds no significant effect of unbundling on commissions. For more active funds, costs increased in relative terms. The research also finds no evidence that increased transparency in observing execution and research costs led to improved fund performance or better information for investors’ fund selection processes. Overall, the study suggests that investors did not significantly benefit from the unbundling of commissions.
- https://blogs.cfainstitute.org/marketintegrity/2019/03/20/mifid-ii-research-unbundling-a-survey-yielding-mixed-results/ – In March 2019, the CFA Institute published a survey titled ‘MiFID II Research Unbundling: A Survey Yielding Mixed Results.’ The survey aimed to assess the impact of MiFID II’s unbundling of research payments from commissions. The findings revealed mixed results, with some asset managers expressing concerns about the increased costs and administrative burdens associated with unbundling, while others appreciated the enhanced transparency and accountability. The survey highlighted the need for further analysis to fully understand the long-term effects of the reforms on the investment industry.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article discusses MiFID II reforms effective from 6 June 2026, indicating recent and relevant content. However, similar discussions have appeared in other sources since December 2025, suggesting some recycled information. ([generationimpact.global](https://generationimpact.global/blog/mifid-ii-research-unbundling-reform/?utm_source=openai))
Quotes check
Score:
7
Notes:
The article includes a quote from Jeff Galvez, global head of commission management at Liquidnet. While the quote is attributed, it cannot be independently verified through available sources, raising concerns about its authenticity.
Source reliability
Score:
6
Notes:
A-Team Insight is a niche publication focusing on financial technology and regulation. While it provides industry-specific insights, its reach and reputation are limited compared to major news organisations, which may affect the reliability of the information presented.
Plausibility check
Score:
7
Notes:
The article’s claims about the reintroduction of joint-payment arrangements under MiFID II reforms align with recent regulatory changes. However, the lack of independent verification for some statements, such as the quote from Jeff Galvez, raises questions about the overall accuracy of the content.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents information on recent MiFID II reforms, but concerns about the originality of content, unverified quotes, and reliance on a niche source without independent verification sources lead to a ‘FAIL’ assessment. ([generationimpact.global](https://generationimpact.global/blog/mifid-ii-research-unbundling-reform/?utm_source=openai))