MiFID II Prompts Swiss Prime Brokerage UBS to Halt Research Distribution

Prime brokerage UBS has halted the distribution of its data feeds to third parties starting from today. The move follows up on the introduction of the MiFID II in Europe, which is limiting the availability of free research to clients of the major banks.

Until now the Swiss bank key providing price targets and some other insights to Bloomberg and some other third party providers. Major research firms have been regularly updating their price targets on various equities and the research that was typically bundled with a trading account was delivered to clients for free.

MiFID II Changes

The has mandated banks to stop providing free research and introduce charges for clients willing to access advanced insights into the securities they are trading. As a result, the banks have unbundled the products and have started charging clients hefty fees for getting the added value.

Now MiFID II regulations have forced one of the big industry players to reconsider providing any part of its proprietary info to third parties. With the data including price targets and estimates, UBS is aiming to limit the ways in which its intellectual property can be used by outside data providers.

UBS Sets Out New Requirements for Third Parties

A note which was sent to clients and third-party data providers such as Bloomberg and Reuters informed them that free research might still be available provided that some requirements are met.

UBS has not elaborated on the matter and as of right now it is not clear what is the criteria which the Swiss bank uses to vet third-party data providers. Nevertheless, the difficult decisions which the research desks of major banks have had to make are playing a decisive role in the generation and consumption of analyst research.

“We are looking for ways to better protect the value of our research content.We are therefore suspending distribution of these data sets (i.e., ratings, price targets and estimates) from certain third-party platforms which we believe do not meet our requirements,” the email from UBS’s Global Head of Research, Juan Luis Perez, said.

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