September 14, 2017 / 1:39 PM / a month ago

AXA's fund arm says to absorb research costs under new EU rules

LONDON (Reuters) - AXA Investment Managers, the fund arm of French insurer AXA, said on Thursday it would pay for external research out of its own pocket when new European Union rules go live in January 2018.

The group joins a growing list of asset managers to say they will absorb the cost of paying for research from brokers when the EU’s Markets in Financial Instruments Directive II kicks in from Jan. 3 next year.

Under the rules, asset managers must agree a fee for all research and either pay for it or pass the cost on to investors, after years of getting the research for free in exchange for routing trade orders through the brokers.

“We feel this is the most appropriate approach to deliver the best results for our clients, provide clarity in their fees and best serve their interests,” said Andrea Rossi, chief executive of AXA Investment Managers in a statement.

Among other asset managers to say they will pay for all research are BlackRock, Deutsche Asset Management and Baillie Gifford.

Reporting by Simon Jessop; Editing by Rachel Armstrong

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