Free morning notes from brokers could end from January

Under new EU rules, firms must soon start charging for research

The morning note genre, one of the ways investment banks and brokers market their services to potential clients, is under threat. Under the EU’s upcoming Markets in Financial Instruments Directive II (MiFID II) rules, firms must soon start charging for research – and that may include the morning musings of analysts and strategists.

The authors risk having to either charge for the notes, restrict their circulation or render them anodyne.

"MiFID II does allow for what are called minor non-monetary benefits, but this only includes a few, very basic types of informational research," said Hannah Meakin, a financial services partner in London at law firm Norton Rose Fulbright. "Certainly, anything that can be described as a recommendation of an investment strategy, or a substantiated opinion or substantial analysis, I think you'd assume is in the investment-research category."

The updated MiFID II is an overhaul of the way markets are overseen that runs to more than 1,000 pages and is huge in scope. When it comes into force in January, it will impact trading in everything from stocks and bonds to derivatives and commodities as it seeks to increase investor protection and transparency.


Morning notes will have to account for MiFID II’s requirement that anything “substantive” – that is, well thought out and potentially useful to readers – should be paid for to avoid being considered an inducement.

In terms of how much banks might charge, a two-tier pricing model is taking shape, according to Neil Shah of Edison Investment Research Ltd.