First State Stewart Asia says to pay for broker research itself

LONDON, April 3 (Reuters) - First State Stewart Asia, the

Asian equities arm of First State Investments, said it will no

longer bill the costs of broker research and advisory services

to clients, as it prepares for the launch of new regulations in

Europe.

Asset managers and brokers in the European Union are being

forced to split up and price separately the services previously

offered together with trade execution in a bundle that was then

billed to the individual fund and its investors.

The move to 'unbundle' has already begun in Britain, but

will apply across the EU from January 2018 under the impending

Markets in Financial Instruments Directive II (MiFID II).

"First State Stewart Asia will compensate the providers of

research by making separate payments directly from their own

resources," it said in a statement on Monday.

"This change reflects what we believe is in the best

interests of the clients of First State Stewart Asia and will

help to meet the requirements of the changing regulatory

environment, in particular MiFID II."

First State Stewart Asia is one of a small number of firms

to confirm their intention to pay for research themselves,

including Jupiter Fund Management and M&G Investments,

the funds arm of insurer Prudential.

First State Investments is rolling out its approach on a

team-by-team basis, and would alert clients to any changes ahead

of the MiFID II deadline of Jan. 3, 2018, a spokeswoman said.

(Reporting by Simon Jessop; Editing by Greg Mahlich)