Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 1, 2012 erstellt
Description:
The relationship between investment managers and brokers has been identified by regulators in Europe and the US as a potential source of conflicts of interest, with investment managers buying a bundle of services ndash; including trade execution and sell-side research ndash; from brokers at the expense of the investors. Little systematic evidence is available, however, on this complex relationship. This paper reports the outcome of a landmark ruling under the UK Freedom of Information Act, whichallowed us to obtain, from UK public pension funds, information on commissions, trading activity, payments for research and other variables. Following an important regulatory change in the UK that increased transparency, we find that average commission rates have fallen, and the proportion spent on research ndash; rather than execution ndash; has increased slightly. However, trading has increased significantly: the average churn rate increased from 27% to 73% from 2005-08, resulting in total commission payments to brokers nearly doubling