Frost Consulting has announced the launch of a research valuation and budgeting software platform, ahead of new rules on research payments in Mifid II.
FrostRB is a platform which allows asset managers to establish monetary value for specific un-priced research, and construct budgets for research that meet the requirements of Mifid II.
Mifid II requires asset managers to bring greater transparency to the investment research market. Asset managers must demonstrate that research they pay for is used, and they must establish clear research budgets.
FrostRB said it will offer transparent research valuation, budgeting and reporting framework that generates customised, multi-asset class research budgets down to the fund level.
Neil Scarth, principal at regulatory consultancy firm, Frost Consulting, explained to The Trade that the research software will ultimately provide clarity for asset managers, in terms of what they are paying for and how much they are spending on it.
Frost Consulting says it has been at the forefront of the debate on research payments, working closely with regulators asset managers and asset owners on the issue.
The data for the software comes from asset managers’ investment process and portfolio construction and how this influences the research budgeting process.
Scarth explained: “We are providing a highly customisable framework within which asset managers can translate their investment process into highly aligned budgets at the fund level.”
Industry experts agree that the regulatory changes following the implementation of Mifid II will transform the way institutions consume research.
Statistics suggest the amount asset managers spend on research in the UK could be slashed by up to £750 million, implying a shift in the financial research market is likely.
Scarth added: “The institutional investment research market is at the inflection point of the biggest change since the US Securities and Exchange Act of 1934.
“FrostRB will drive competitive advantage for asset managers as well as provide greater transparency and accountability for asset owners with an interest in maximizing the ROI on their research spend.”