MiFID II, the sprawling EU markets regulation that came into effect this year, requires banks and brokers to charge fund managers separately for analyst research as well as for “corporate access”, such as face-to-face meetings with company management.
David Shriver, communications director at online UK retail company Ocado, said companies needed to adapt. “It’s a fascinating time,” he said. “If you still rely heavily on intermediaries then you need to be able to engage differently. If you are familiar with this process of disintermediation then you should be OK.”
Companies have been devising workarounds with investors. In some cases, asset managers who have not attended conferences in an official capacity have turned up to meet company representatives without brokers. There have even been examples of companies adding days to investor roadshows in order to meet local investors directly. Many predict that this disintermediation of banks and brokers will be a boon for the investor relations profession. “UK corporate brokers have been a comfort blanket for companies that you do not get anywhere else in the world,” said Fraser Thorne, chief executive of Edison, an investment research company. “In North America, every company has a director of investor relations and the UK is going to have to adapt to that.”
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