Boutique Broker Ditches Surveys With Swipe at EU’s Market Rules

(Bloomberg) --

First they hit research budgets and disclaimers -- now Europe’s market rules are affecting stockbrokers’ awards season.

Liberum Capital Ltd, a London-based broker, is no longer taking part in the annual Extel & Institutional Investor Europe survey, Chief Executive Officer Shane Le Prevost said in a note to clients, seen by Bloomberg News.

Brokers who rank highly in the poll of fund managers gain a marketing fillip and industry bragging rights. However, the process has “unfortunately become a distraction which we can no longer justify or support,” said Le Prevost.

“The ever increasing demands on our industry have taken us to a point where we believe that fund managers in particular find the demands of surveys, alongside MiFID II requirements, an unnecessary and unwanted burden,” he said.

Europe’s sweeping overhaul of markets rules, known as MiFID II, has forced greater transparency across the industry since its introduction two years ago. One of the new requirements means banks must charge separately for research and trading, prompting consolidation and cutbacks for some smaller players.

Australia’s Macquarie Group Ltd. signaled a partial retreat last year, announcing 100 job cuts in equities as well as a research tie-up with Kepler Cheuvreux of Paris, citing “structural changes” in the industry.

Le Prevost said that more than 300 of Liberum’s institutional clients choose to pay for its research and “we don’t feel the need to chase any further recognition” from surveys. Fund managers ranked Liberum first for corporate broking in the past four Extel surveys, the note said.

To contact the reporters on this story: Viren Vaghela in London at vvaghela1@bloomberg.net;Harry Wilson in London at hwilson57@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Marion Dakers

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