MiFID II represents the greatest wholesale change to the way in which companies, investors and analysts interact in many years. Its scope is broad and deep-seated, it must be taken seriously and companies must be on the front foot in planning and implementing a successful response. Only with the right strategy will companies be able to adapt and benefit from the shake-up. Now is the time.
We have produced a guide to what the change means for corporates in Europe, how investor relations activities will need to adapt and how Maitland/AMO can help.
MiFID II - The Impact
Pre-MiFID II, the cost of equity analyst research to fund managers has been ‘bundled’ with the sales commission charged when institutional investors trade shares through particular brokers. Providing corporate access to these fund managers has been another service offered by brokers with no explicit cost. A key aim of MiFID II is to separate the cost of these ancillary services from the cost of trading shares. This is in the name of transparency, to reduce the incidence or risk of inducement and to protect the consumer.
Sell-Side and Research challenge
When institutional investors have to pay explicitly for sell-side research, they need to justify this expense. Many already have sophisticated in-house research operations. We expect to see these grow, along with a more selective approach to buying in external research.
The Buy-Side and Corporate Access challenge
Management of corporate access between fund managers and companies has been an important service provided by many brokers at no cost to fund managers. Under MiFID II the buy-side are unable to accept this service from brokers without charge. We expect this to lead to shifting dynamics in the provision of corporate access.
Disintermediation of market contact challenge
Companies will need to take greater ownership of executing every part of the IR strategy to achieve effective market dialogue and evolve the company’s profile. They will need to ensure every market-facing communications tool facilitates meaningful coverage and delivers a cogent, measurable investment case.
The Maitland/AMO MiFID Benchmark and IR Offering
WE CAN HELP. Every listed company in Europe needs to prioritise their response to challenges and opportunities presented by MiFID II. It is crucial to have a firm grasp of your current positioning, market interaction and how the market is responding, through independent and objective analysis. The Maitland/AMO MiFID Benchmark is your first step.
The Maitland/AMO MiFID Benchmark study will analyse and provide actionable recommendations covering:
- How you articulate your investment proposition
- How you interact with analyst and investor audiences
- Priorities for your company coverage and positioning
Maitland/AMO has been providing valued capital markets and IR advice for over 20 years and we offer the following services:
MiFID II - Maitland/AMO IR Offering
Retained Advisory Service
- Equity story development
- Financial calendar support
- Consensus and guidance
- Feedback – buy-side and sell-side
- Digital content advice
Project Oriented Advice
- Investor targeting, roadshow organisation, PCB targeting, feedback
- Capital Markets Day preparation
- Executive team and board training
- Website content review
- Perception studies
- Annual IR plan development, contact outsourcing, CRM
Emma has worked at Maitland/AMO for 10 years and sits on the Board of the Investor Relations Society and is also Chair of the Policy Committee
Peter joined Maitland/AMO in 2017 as a senior consultant in the capital markets and investor relations team