ITG (NYSE:ITG), an independent execution broker and financial technology provider, has launched an upgraded Research Payment Account (RPA) solution, helping support asset managers in adapting to new regulatory changes in Europe, including the upcoming passage of MiFID II legislation in 2018.
In particular, the newly enhanced RPA solution will emphasize the unbundling of research and execution regulations stipulated under MiFID II. This will include a number of new features to its existing framework, including a greater focus on research capabilities, security, and other administration functionality.
The launch of an enhanced RPA is important for clients as it will help them be more prepared to meet any potential challenges of MiFID II compliance and reporting, also seeking to alleviate any prevalent burdens and regulatory constraints.
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Improved Functionality over Traditional Means
ITG’s newly enhanced RPA solution will also focus on considerations of funding flexibility and security. The RPA can be funded with a research charge alongside the execution, similar in nature to existing Commission Sharing Agreement (CSA). However, the RPA differs from traditional methods in that it can also be funded with a direct research charge to investors or from a firm’s own P&L.
Moreover, ITG’s RPA solution also will include a fortified suite of administrative tools that will aim to help enable asset managers to set research valuations, create and track budgets for their end clients, segregate RPA balances by portfolio, strategy, client, region or investment team.
According to ITG’s Head of Global Commission Management, Jack Pollina, in a statement on the upgrade: “The coming MiFID II unbundling requirements are likely to impact asset managers around the world, not just in Europe. More than ever, European and global asset managers need an experienced global commission management partner to help them navigate and implement complex operational processes.”