Will bond funds be helped or hindered by MiFID II clampdown?

The Financial Conduct Authority (FCA) has said European dealing commission reforms will benefit fixed income funds, but market participants remain uncertain of the impact of the changes.

Yesterday the FCA gave its backing to MiFID II proposals preventing fund groups from using dealing commission to pay for research, following on from its own discussion paper in July 2014. The scope of those reforms has so far focused on equity funds - the FCA said last July it "had not explored" the impact on fixed income funds. Yesterday's paper, however, saw the regulator address the subject for the first time. The FCA said the reforms will "bring transparency in an area that is currently more opaque than equity markets since research is entirely embedded in implicit transaction cos...