RSRCHXchange
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| RSRCHXchange | |
| Industry | Financial Technology |
| Founded | London, England (2014) |
| Services | Institutional Financial Research |
| Website | www.rsrchxchange.com |
Research Exchange Ltd is a FinTech company servicing the global asset management industry operating under the trading name RSRCHXchange. Its platform, RSRCHX, is an online marketplace for unbundled financial research. RSRCHX provides asset management firms with a cloud-based repository of reports. Launched in September 2015, RSRCHX incorporates elasticsearch, compliance checks and Commission Sharing Agreement (CSA) and credit card payment administration. RSRCHXchange is one of a number of FinTech start-ups offering products which relate to MiFID II (Markets in Financial Instruments Directive), the European Union financial reforms intended as a response to the financial crisis to improve the functioning of financial markets and enhance investor protection. RSRCHXchange's technology differs from other financial services vendors because its research catalogue is not dependent on RIXML, the industry-developed language for tagging documents. RSRCHXchange specialises in research unbundling, one of the most contentious topics of the regulation.
Globally $20bn a year is spent on research by asset managers and in the UK alone, the FCA estimates $4.5bn is spent on research. Investment banks being the predominant supplier of external research to most investment managers. This effective oligopoly is the result of bundled commission rates where all services, including research, are paid for at the point of trading exclusively to the executing counterparty. Therefore, the investment banks who enjoy the largest trading volumes have also captured a dominant share of research payments.
The UK FCA (Financial Conduct Authority) and ESMA (European Securities and Markets Authority) have been debating reforms to the economic structure of investment research for a decade. The dot com boom of 2000 made it abundantly clear to regulators that equity research, investors, fund managers and public companies were too heavily interdependent. The US responded by imposing restrictions on sell side analyst activities, while the UK placed the responsibility on the buy side through the Myners Report (2001), which recommended changes in commission and investment research payments – effectively unbundling. The FCA has consistently argued that unbundling research from dealing commissions would drive both price efficiency and market transparency and at the same time enhance competition.
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