12 June 2023

The Honorable Gary Gensler, Chair
U.S. Securities and Exchange Commission
100 F Street NE
Washington, DC 20549

Mr. Andrew Griffith MP
Economic Secretary to the Treasury
HM Treasury
1 Horse Guards Road
SW1A 2HQ

Commissioner Mairead McGuinness
European Commission
Rue de Spa
1000 Bruxelles
Belgium

Chair Gensler, Economic Secretary Andrew Griffith, and Commissioner McGuinness:

On behalf of the Global Financial Markets Association (GFMA),1 which consists of the Association for Financial Markets in Europe (AFME), the Asia Securities Industry & Financial Markets Association (ASIFMA), and the Securities Industry and Financial Markets Association (SIFMA), we have greatly appreciated discussing with your respective organizations the issues certain of our members face in connection with the Markets in Financial Instruments Directive II (MiFID II) requirement for investment managers to make separate, unbundled payments for research. At present, all three of your respective jurisdictions are in the process of potential change to the regime as it stands:

• The E.U. is actively considering potential changes to the MiFID II unbundling requirement, including making unbundling optional.
• In December 2022, the U.K. Chancellor announced that he would be launching an independent review of financial services investment research, and the review is currently underway.
• And in the U.S., the date by which the SEC staff’s MiFID II no-action letter expires – July 3, 2023 – is rapidly approaching.

1 The GFMA represents the common interests of the world’s leading financial and capital market participants, to provide a collective voice on matters that support global capital markets. We advocate on policies to address risks that have no borders, regional market developments that impact global capital markets, and policies that promote efficient cross-border capital flows, benefiting broader global economic growth. The GFMA brings together three of the world’s leading financial trade associations to address the increasingly important global
regulatory agenda and to promote coordinated advocacy efforts. The Association for Financial Markets in Europe (AFME) in London, Brussels and Frankfurt, the Asia Securities Industry & Financial Markets Association (ASIFMA) in Hong Kong and the Securities Industry and Financial Markets Association (SIFMA) in New York and Washington are, respectively, the European, Asian and North American members of GFMA.