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Principal Global Investors selects Visible Alpha and ITG for equity research valuation and payment administration

First Published 7th September 2017

Solution to help PGI create efficiencies across research process and meet MiFID II requirements

Jack Pollina, ITG

Jack Pollina, ITG

Des Moines, Iowa - Principal Global Investors (PGI) have selected Visible Alpha's ONEaccess platform and ITG, the independent broker and financial technology provider, to enhance the process for managing equity broker and research evaluation and consumption. The combination will help the firm to increase monitoring and transparency of research processes creating additional efficiencies while also allowing the firm to meet their MiFID II requirements.

Through PGI's engagement with Visible Alpha and ITG, the firm's approximately 100 equity research professionals will be able to discover corporate access events, set up custom valuation frameworks for their interactions with brokers and research providers in a granular way, and oversee payment of these interactions.

The key elements of PGI's research management and evaluation process include:

The ONEaccess Platform for Research Valuation: Empowers asset managers to monitor, aggregate and analyze all of their interactions with research providers in one place, ensuring that consumption is aligned with the firm's research budgets. To facilitate the assessment of research quality, customizable research provider scorecards let firms assign weightings to valuable research services, build broker votes from the bottom-up using detailed consumption and value metrics, and then action payments to RPAs.

The ITG Research Payment Account (RPA): Enables asset managers with the flexibility to fund their RPA with either a CSA commission or a research charge alongside the execution in a manner that can be operationally similar to a traditional Commission Sharing Agreement (CSA). The ITG RPA can also be funded with a direct research charge to investors or from a firm's own P&L. RPA accounts managed by ITG are held in a bank account in the name of the asset manager at one of several major global banks, segregated from brokers' funds and controlled by the asset manager.

"ITG's comprehensive RPA solution, working in collaboration with Visible Alpha, will enable Principal to address the challenges of MiFID II compliance and reporting, streamlining regulatory and administrative workflows and providing payment flexibility," said Jack Pollina, Head of Global Commission Management at ITG.

In March 2017, ITG and ONEaccess announced the availability of an integrated solution to meet MiFID II demands.