Price formation of FICC research following MiFID II unbundling rules

Purpose Traditionally, full-service broker/dealers catering to institutional investors have bundled trade execution with investment research. Since 2018, new market regulation has forced broker/dealers to unbundle and to sell research separately. The purpose of this paper is to shed some light on the expected pricing of research. Design/methodology/approach A stylized model is presented in this study in which a monopolist fixed income,...