Broker Commissions: The Great Unbundling Bungle

Handling sell-side research and commissions has typically been a mundane and relatively simple function for investment managers. But regulatory authorities in Europe are about to turn the process upside down with a little-known but potentially impactful vestige of Mifid II. Tim Bourgaize Murray explores the technological ramifications.


The sale of information about listed companies is as old as the stock markets themselves. Tracking and managing the cost of this research is naturally part of the process—and in modern times has often been linked-up or bundled with the cost of executing the trade.

Indeed, even the famous Buttonwood Agreement of 1792, establishing the New York Stock Exchange, really did two very simple things: establish exclusive brokerage agreements, and set the commission rate at .25 percent. Since then, if not

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