Blog : The New Swedish Model

Fully anticipating an article about a new Volvo XC90 or the emergence of the next Brit Ekland, it was somewhat of a disappointment to read a piece about dealing commissions, research payment accounts (RPAs) and asset management.

We’ve had many things emerge from Scandinavia over recent years – cars with lights permanently on, impossibly attractive actors & actresses, through to a whole range of thriller novels and TV series & films that we then insist on remaking – but I wasn’t expecting an article explaining that a handful of large Swedish asset managers had fully “unbundled”.

This was in response to a letter in May 2014 from the Swedish financial markets regulator, Finansinspektonen (FI), about the use of CSAs  in the area of collective investments such as mutual funds.   The FI stated amongst other things that research costs should be distinct from those relating to trading, that research costs should be reported separately and that there should be a continuous and objective evaluation process for assessing research providers.

In short, the response from some Swedish firms is that they are moving away from using clients’ dealing commission to pay for research.  Instead, they will be setting up RPAs, containing fixed payments from their clients, from which agreed amounts will be paid out for investment research.

These “first movers” may be pre-empting the rest of the European markets.  The FI letter was also sent to ESMA and it will be interesting to see how they and other regulators and firms will react.

Those who are resigned to this outcome, especially those in the UK, may just shrug their shoulders and believe that this is all inevitable and start making similar preparations.  Others, such as those in France who are hoping that CSAs will somehow remain, albeit with additional constraints or limits on their use, must be desolate.  For, surely, if RPAs work in Sweden then why not elsewhere?

So where does everyone go from here?  Well, basically, some will still cling to the hope that there will be enough MEP opposition in Brussels to vote against adopting this within MiFID II.  The rest – the pragmatists, the realists and possibly other “first mover” innovators – may start looking at this sooner rather than later.

In the meantime, I shall settle down and watch my boxsets of ‘The Bridge’ and ‘The Killing’ and wait for the story to fully unfold.


  • 10 Oct, 2015
  • Quinapalus
  • Dealing Commission, ESMA, MiFID, Research, Unbundling,

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