PS25/4: Investment research payment optionality for fund managers

We set out our final rules to improve the investment research market, including more options for paying for research.

Read PS25/4 (PDF)

Why we are changing

We are taking forward recommendations from the Investment Research Review and feedback to our consultation (CP24/21).

The final rules will:

  • Promote effective competition in the interests of investors.
  • Secure an appropriate degree of consumer protection.
  • Enhance the competitiveness of UK fund managers.

Who this is for

Our final rules will affect:

  • UK undertakings for collective investment in transferable securities (UCITS) management companies.
  • Full-scope UK alternative investment fund managers (AIFMs).
  • Small authorised UK AIFMs and residual collective investment scheme operators.

The rules might also be of interest to:

  • Depositaries of authorised funds or alternative investment funds.
  • Investment platforms.
  • Financial advisers.
  • Investment consultants.
  • Investors in authorised funds or alternative investment funds.

Next steps 

We have implemented rules allowing fund managers to pay for research with a joint payment option.

Firms that decide to take up the joint payment option should familiarise themselves with our final rules on joint payments in COBS 18 Annex 1 and relevant rules in COLL for authorised funds.

Background

In 2023, the UK Investment Research Review recommended several measures to improve the investment research market.

To take forward the recommendation, we introduced a joint payment option for MiFID firms, including those managing segregated investments.  

CP24/21 proposed changes to the existing rules, allowing fund managers to pay for investment research using a joint payment option for research and execution services, subject to a set of guardrails. This joint payment option for fund managers is based on the rules introduced for MiFID investment firms.