UKEMA welcomes move for wider retail access to investment research

The UK Equity Markets Association (UKEMA) has welcomed backing for its calls to widen access to investment research to support retail participation in equity markets.

The Investment Research Review, published alongside the Chancellor’s Mansion House speech, backed recommendations made by UKEMA to enable retail investors to access investment research to help with “levelling the playing field” with institutional investors. The UKEMA’s full response to the Review can be read here.

In her Executive Summary, the Chair of the Review Rachel Kent recommended that “the regulations relating to access good quality investment research be reviewed to facilitate the provision of research to retail investors. At present, without access to the same research as institutional investors, too many retail investors rely on information sources such as chat rooms.” The report also recommended that a new code of conduct be prepared with the support of trade bodies to cover issuer-sponsored research.

In its submission to the Review, the UKEMA highlighted the important role of research in the UK capital markets ecosystem, but noted that “in the recent past, the quality and breadth of research has declined, in particular for small and mid-cap companies.” UKEMA also noted that “current UK rules governing production and distribution of investment research, however, make it difficult and expensive (both in terms of costs incurred and risks assumed), to produce and distribute research to retail investors.”

Simon Rafferty, Chair of UKEMA said: “This is a significant step forward for supporting the greater retail participation that UKEMA has been calling for. Providing wider access to research is an important reform, which UKEMA will be now working with the FCA to support as part our work to boost retail investment in the small and mid-cap sector and level the playing field.”