More than a third of asset managers are preparing to scale back their use of investment bank research ahead of a regulatory clampdown on how they pay for it, according to FN’s CIO Snapshot 2017.

From January 2018, under the revised Markets in Financial Instruments Directive, managers can no longer pay for research from trade execution commissions, which are funded by clients. Instead managers must either set up separate research payment accounts for clients, with budgets agreed in advance, or pay for research out of their own pocket.