An examination of the impact Europe’s Mifid II regulation has had on investor relations.
In January 2018 the European Union (EU) began implementing the second round of its Markets in Financial Instruments Directive (Mifid II). Designed to increase transparency, Mifid II forces banks and brokerages to charge separately for research. The impact of this directive reaches beyond the EU and affects the whole global investment community.
This report looks at how the implementation of Mifid II has affected investor relations. It looks at the overall impression IROs have of Mifid II and what they consider to be its key benefits and challenges. The report further investigates how a number of aspects of IR have been affected by Mifid II and whether this has led to an increase or decrease in workload.
The findings in this report are taken from a survey of IROs conducted in May 2019, more than 16 months after the implementation of Mifid II. This means respondents had time to fully assess and understand the impact Mifid II has had over this time, providing a more measured outlook than some of the more immediate impact assessments.
The survey was conducted among members of the IR Magazine research panel and 79 members responded. The survey was global, across all regions and market cap sizes. For the purposes of this report, findings have been further segmented, comparing the results of IROs from within Europe with those outside of Europe, as well as IR professionals from companies of less than $5 bn in market cap to those from companies of more than $5 bn. Further analysis of some results is made between IROs who have an overall negative view of Mifid II and those who have a neutral or positive view.
SMALL CAP <$1 BN MID-CAP $1 BN-$4.99 BN LARGE CAP $5 BN-$30 BN MEGA-CAP >$30 BN
Key findings
Half of IROs have an overall negative view of the impact of Mifid II, while just 14 percent have a positive impression.
More than a third of IR practitioners have changed their approach to corporate access as a result of Mifid II.
Just under a quarter of IROs have seen a change in the quality of analyst research coverage.
Nearly a third have seen a decrease in the number of investor meetings, with an average fall in numbers of one fifth among those who have seen a decrease.
More than a third of IROs have seen a decrease in the number of analysts covering their company.
More than half of IROs have increased their direct targeting of investors.
Since the introduction of Mifid II, 56 percent of IROs have seen an increase in direct inquiries from larger investors.
Corporate access
More than a third of IR practitioners have changed their approach to corporate access since the introduction of Mifid II. These figures change very little according to company size or whether the firm is based inside or outside Europe.
Changes in approach to corporate access correlate with IROs’ attitude to Mifid II: more than half of those who have a negative impression of Mifid II have changed their approach to corporate access since its introduction. This compares with just 19 percent among those who have a neutral or positive impression.
Direct targeting
More than half of IROs globally have increased their direct targeting of investors since the introduction of Mifid II. Nearly seven in 10 European IR professionals have increased their direct targeting, as have 64 percent of large/mega-cap company IROs.
IROs with a negative view of Mifid II are much more likely to have increased their direct targeting than those with a neutral or positive view: 69 percent compared with 38 percent.
Direct targeting success
Just over three in 10 IROs view their direct targeting of investors as having been successful since the introduction of Mifid II, with the majority of IROs considering it neither successful nor unsuccessful. Larger companies and companies with a neutral or positive impression of Mifid II are more likely to view their direct targeting as successful.
Based on interviews with 79 members of the IR Magazine research panel, Mifid II examines the impact this European regulation has had on investor relations since its introduction in January 2018.
The report looks in detail at the following issues for IR:
What is the IRO’s overall impression of Mifid II?
How has it affected corporate access and the quality of analysts’ research?
What aspects of IROs’ workload have seen an increase or decrease since the introduction of Mifid II?
What do IROs see as the main benefits and challenges of the regulation?
The full report is available to IR Advanced and IR Intel subscribers only. Not a subscriber or want to upgrade? Click here.
Download the full report here
In addition to the print magazine and exclusive online features, subscribers get access to our library of research reports, including:
Award-Winning IR reports for Europe, Canada and the US.
Board Diversity (IR Advanced only)
Investor Engagement (IR Advanced only)
IR Resources (IR Advanced only)
IR Websites (IR Advanced only)
Outsourcing IR (IR Advanced only)
Global IR Salary & Careers
Senior Management IR Practice (IR Advanced only)
Technology & IR
The IR Function (IR Advanced only)
The Value of IR
Women in IR
Contact us
For more information on our reports, or if you have any questions about subscriptions with IR Magazine, please contact our subscriptions team:
Paul Campbell Subscriptions Manager Email: paul.campbell@irmagazine.com Tel: +44 20 8004 5337