MiFID II won't come into force until 3rd of January 2018 and history suggests it could be delayed further still. Nonetheless, banks aren't waiting to cut costs. Headhunters say RBS is the latest to take remedial action before the new regulations come into effect.
The state-owned bank is understood to have made a swathe of cuts across its fixed income research function. They are said to include David Simmonds, RBS's global head of research. The FCA Register suggests that Simmonds had been working for RBS since 2005. Colleagues confirmed his departure.
RBS didn't respond to a request for information. It's also understood to have made several of its fixed income researchers into desk strategists and cut the supervisory analysts who worked with them on research reports."RBS doesn't need the supervisory analysts any more - it's not going to be producing written research," claims one headhunter.
Under MiFID II, banks are compelled to charge clients separately for the costs of research when they charge them for trades. This is prompting banks to rethink their research offerings across fixed income and equities. In some cases, banks are recruiting and retaining senior star researchers whose product clients will pay for. This doesn't appear to be the case at RBS.
Photo credit: 79 - 83 Colmore Row - RBS - Royal Bank of Scotland by Elliott Brown is licensed under CC BY 2.0.b