Big banks risk losing US$240m in research business with regulatory overhaul

Hong Kong

SOME global investment banks risk losing up to US$240 million in business by 2020 as a regulatory overhaul, which will change the way securities research is priced and used, makes independent firms more attractive for clients, a financial consultancy said.

Unlike the big banks, the smaller securities research firms do not offer trading or corporate finance. They rely entirely on what they charge for research, as will be required under the European Union's Markets in Financial Instruments Directive, or MiFID II, due to take effect in January 2018.