Is Equity Research Unbundling Spreading Beyond Europe?

July 28, 2026 By Yodaplus

Equity research unbundling is no longer just a European discussion. While MiFID II introduced mandatory research unbundling across the European Union in 2018, its influence has reached financial markets worldwide. Asset managers, regulators, and research providers in North America, Asia-Pacific, and other regions are evaluating similar approaches or voluntarily adopting unbundled research practices.

Although no other major jurisdiction has implemented rules identical to MiFID II, the global conversation has shifted toward greater transparency, clearer pricing, and measurable value in investment research.

What Is Equity Research Unbundling?

Research unbundling separates the cost of equity research from trade execution.

Before MiFID II, investment firms typically received research as part of brokerage commissions.

Under the unbundled model:

• Research is priced separately.
• Trading execution is charged independently.
• Asset managers decide which research providers deserve their budgets.
• Clients gain greater transparency into research spending.

This has changed how asset managers, portfolio managers, and investment analysts evaluate research providers.

Why Did Europe Introduce Unbundling?

MiFID II aimed to improve fairness and transparency in financial markets.

Its objectives included:

• Reducing conflicts of interest
• Improving price transparency
• Encouraging higher-quality research
• Giving investors greater visibility into research costs

According to the European Securities and Markets Authority (ESMA), separating research payments helps ensure investment decisions are made in clients’ best interests rather than being influenced by bundled brokerage arrangements.

Has Unbundling Influenced Other Markets?

Yes, although not through identical regulation.

Many global investment firms operate across multiple regions.

Rather than maintaining separate operating models, several international firms voluntarily adopted similar research procurement processes across their global businesses.

This has encouraged wider adoption of:

• Formal research budgets
• Provider evaluations
• Performance measurement
• Transparent pricing
• Research quality assessments

The United States

The U.S. has not introduced mandatory research unbundling comparable to MiFID II.

However, its influence has still been significant.

In 2017, the U.S. Securities and Exchange Commission (SEC) issued temporary no-action relief allowing broker-dealers to receive separate payments for research from MiFID II-regulated firms without triggering investment adviser registration issues.

More recently, the SEC adopted Rule 15l-2 under the Securities Exchange Act, allowing broker-dealers to provide research separately from execution under certain conditions. This has made it easier for firms to support flexible research payment models.

Although bundled research remains common in the U.S., many global firms now evaluate research spending much more carefully than they did before MiFID II.

Asia-Pacific

Several Asia-Pacific markets have closely monitored Europe’s experience.

Countries including:

• Singapore
• Hong Kong
• Australia
• Japan

have generally preferred market-driven approaches instead of mandatory unbundling.

Many regional asset managers now negotiate research pricing separately, particularly when working with global investment banks and international research providers.

Growing Focus on Research Value

One lasting effect of MiFID II is the increased emphasis on research quality.

Investment firms increasingly assess:

• Forecast accuracy
• Original insights
• Industry expertise
• Financial modelling
• Accessibility of analysts
• Investment outcomes

Research providers must now demonstrate measurable value rather than relying on historical relationships.

Research Spending Has Changed

According to Coalition Greenwich, external research budgets among European asset managers declined by approximately 20–30% following MiFID II.

While budgets became smaller, spending became more targeted.

Many firms reduced the number of research providers while increasing spending on those delivering differentiated analyst reports and specialist expertise.

AI Is Reshaping Investment Research

Another major development influencing global research markets is artificial intelligence.

Modern AI for equity research supports:

• Financial statement analysis
• Data aggregation
• Company screening
• Peer benchmarking
• Valuation modelling
• Report drafting

These capabilities allow research firms to produce higher-quality equity research reports with greater efficiency.

According to Deloitte, AI has the potential to automate 30–40% of repetitive knowledge work in financial services, allowing analysts to focus on investment judgement and client engagement.

What Could Happen Next?

Global regulators are unlikely to copy MiFID II exactly.

Instead, many markets are expected to adopt selected principles such as:

• Greater pricing transparency
• Independent research evaluation
• Clearer governance
• Improved client disclosures
• Better measurement of research effectiveness

This gradual approach may achieve many of the same objectives without introducing identical regulatory frameworks.

What It Means for Research Providers

Research providers should prepare for increasing competition regardless of regulation.

Successful firms will likely focus on:

• Differentiated investment research
• Specialist sector expertise
• Technology-enabled workflows
• AI-assisted research production
• Strong client relationships

As investors become more selective, demonstrating measurable value will remain the key competitive advantage.

Conclusion

While mandatory equity research unbundling remains primarily a European regulatory framework, its influence has spread well beyond Europe. Investment firms across North America and Asia-Pacific are adopting more transparent research purchasing practices, placing greater emphasis on quality, measurable outcomes, and cost efficiency. At the same time, advances in AI are helping research providers improve productivity and deliver more valuable insights in an increasingly competitive market.

Yodaplus Agentic AI Services for Financial Operations helps financial institutions, research providers, asset managers, and investment analysts modernize the research process through intelligent automation. By combining Agentic AI with advanced financial analysis, Yodaplus streamlines data collection, financial modelling, peer benchmarking, valuation analysis, and equity research report generation, enabling research teams to produce deeper insights faster while reducing manual effort and improving operational efficiency.

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