Investment Research Review

Following the announcement of an upcoming review of the investment research market in UK, the government has now published a call for evidence in same context. To recall, early March 2023, the government announced this review due to the significance of investment research for both investors and investee companies. Specifically, the goal of the review is to
– assess the current level, type, and quality of research offered in UK;
– assess the perception of the current status quo;
– assess how the UK compares to other countries as far as the performance of investment research is concerned;
– assess the demand of investors for such research;
– assess how levels of research relate to the attractiveness of the UK financial market and issuers willingness to raise capital in UK.
In its call for evidence now, the government seeks views from various stakeholders, including issuers, investors, portfolio managers, trading venues, or legal councils, on a number of questions it has set out in the document. Besides answers to the noted questions, the government would strongly appreciate any „real evidence“ as regards the raised issues. Some of the questions are quoted below; for all of them, please refer to the original document.
– How does investment research provision in the UK compare, or how is it perceived to compare, with other major international financial services centres?
– How important is investment research to the attractiveness of the UK public markets to listed companies (or companies considering listing) and their investors or to companies looking to access capital in private markets?
– Are there specific issues relevant to UK investment research on smaller UK listed or quoted companies that should be addressed? What counts as “smaller” for these purposes?
– What impact does the current UK legislative and regulatory environment have on the provision and quality of research, including (but not limited to) the MiFID II unbundling rules?
– Have the UK 2022 revisions to the MiFID unbundling rules applicable to smaller quoted companies helped to facilitate investment research in relation to those companies?
– What might be the impact of any changes on the proposed UK legislative and regulatory environment on the provision and quality of research, the management of conflicts and payment for the provision of research?
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The consultation closes on April 24, 2023.