The European Securities and Markets Authority (ESMA) has finalised two key regulatory updates that will significantly impact investment firms and asset managers. These changes refine how firms approach order execution and manage research payments under MiFID II.
Zeidler, a technology-driven law firm, recently delved into the research payments framework and what they mean for investment firms and asset managers.
On 10 April 2025, ESMA published its final Regulatory Technical Standards (RTS) outlining how firms should evaluate and maintain effective order execution policies. The goal is to ensure consistent delivery of best execution outcomes. Firms must justify execution venue selection, categorise instruments, and enhance internal oversight, with clear accountability at senior levels.
In parallel, ESMA released its final technical advice on revising the MiFID II research payment framework. Under the updated rules, firms can now make joint payments for execution and research regardless of issuer size. Firms must disclose remuneration methods, separate execution and research costs, and assess research value annually.
Both reforms support the EU’s broader goals of transparency and investor protection, offering an 18-month window for implementation.
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