UK fund managers have started to unsubscribe and keep audit trails on emails from analysts and quoted company staff over concerns these could be in breach of Mifid II rules on research.
Rosemary Banyard, director at Sanford DeLand Asset Management and manager of the CFP SDL Free Spirit fund, and David Ogden, compliance manager for Seven Investment Management, said they were having to "stem the flow" of email information that could be defined as inducements.
Mr Ogden said: "Mifid means we have to be very careful that we take all reasonable steps not to receive material which could be defined as an inducement but inevitably some material will come through.
"Keeping a track of the steps we take to stem the flow is just something we have to do."
Ms Banyard commented: "I think there is still some confusion among analysts and company sales representatives over what constitutes 'research' under the new rules.
"We have had to unsubscribe from a handful of brokers and company sales staff who have sent research notes - even from brokers who sent frequent reminders last year warning their subscribers about the Mifid II rules [on not accepting research after January this year unless it is paid for]."
The Mifid II rules, which came into force on 3 January, aim to reduce any possible inducement that could be caused by company analysts sending free research to fund management houses.
Under the rules, fund management firms must not accept external research unless it is paid for; the majority of UK fund managers have promised to absorb any such costs themselves, and not pass the additional costs of research onto the end investor.
However, according to Ms Banyard, there are some sales staff at brokerages and at quoted companies who are sending out "chit chat" and newsy updates which contain links to URLs where there are full research notes.
"The onus is on us as fund managers", she added.
"We receive hundreds of emails and we have to monitor these". All the emails to which they have unsubscribed are put into a central folder so compliance can see these and there is a proper audit trail.
Richard Janes, spokesman for national wealth adviser Brewin Dolphin, said the transparency brought in by the unbundling of research would reassure clients and their advisers there has been “no undue inducement in that regard by their investment manager to use one firm over another".
“They may still end up paying for the research if their firm employs research payment accounts, but it will be clear to them what the cost is and, if the firm pays for research centrally, it could end up in an overall reduction in cost for the client.”
To learn more about how unbundling will work, read FTAdviser's Guide to Mifid II implementation, which qualifies for CPD.