The European Commission looks set to stand its ground on plans to force asset managers to fully separate payments for trading and research across fixed income as well as equity products, a move that will put the future of bond markets in a "difficult place", according to practitioners.

Regulators' plans to 'unbundle' payments - being enacted as part of the revised Markets in Financial Instruments Directive, known as Mifid II - are designed to increase transparency over research fees and address a perceived conflict in equity markets, whereby fund managers direct equity trades to brokers as a way of paying for research they have used, rather than because they offer the best execution.