Changes address FCA concerns on asset manager dealing commission shortcomings

ERIC (Electronic Research Interchange), the marketplace for institutional investment research, has released the latest iteration of its platform and launched a research management dashboard which enables asset managers to better identify the worth of the research consumed within their organisation.

The redesign is part of the ongoing development of the ERIC platform, in consultation with the buy-side, and addresses the concerns expressed by the FCA in its recent review of asset managers’ use of dealing commission. The FCA identified that many managers could not attribute a cost to substantive research, record broker interactions or explain the rational for research commission expenditure decisions.

The new ERIC platform delivers greater capacity for evaluating and reporting on the research consumed by its buy-side participants, whether consumed via the platform or outwith. It streamlines the process for submitting bespoke research tenders and adds an ‘Ask ERIC’ option, whereby asset managers can anonymously make specific requests to a host of research providers.

A new research management dashboard enables investment professionals to record details of interactions with providers and assign their own monetary values to research, whether consumed as a report, an analyst meeting, or specially commissioned project. The information is shared privately within asset management organisations or teams  to build a unique library of evaluated content, allowing buy-side firms to better analyse the value of future research and determine their own needs.

Chris Turnbull, co-founder of ERIC, says: “Our new developments will make it easier for asset managers to comply with FCA requirements and establish their research needs. ERIC is designed to facilitate conversations between asset managers and research providers, which will lead to greater clarity on the kind of research the buy-side is looking for and will allow the sell-side to tailor their output accordingly.

“Investment research is evolving and must demonstrate true value. We have upgraded our platform to simplify asset managers’ relationship with research and give them the tools they need to make more informed decisions about their requirements.”