Francisco Soares Machado analyses the new rules governing capital markets

New rules are set to come into force in the capital markets, aiming to simplify procedures and encourage access to financing through this channel. To that end, certain barriers affecting banking activity will be removed, particularly regarding the simultaneous provision of order execution and investment research services, while cross-border activity will be encouraged through the creation of a European platform aggregating financial products across the EU.

The decree-law also introduces new rules on the remuneration of research and analysis, whether issuer-sponsored or not. Intermediaries will be required to assess annually the quality, usability and value of investment recommendations, as well as their contribution to better investment decisions.

However, Francisco Soares Machado, Partner at SÉRVULO of Finance and Governance departement, believes that issuer-sponsored research cannot be “truly independent”. In an interview with Negócios on NOW, the lawyer argues that this is ultimately a “trade-off”: although such investment recommendations may be viewed with some scepticism, the fact that they are no longer treated as mere marketing communications gives them greater credibility. “Once this labelling of issuer-sponsored financial research is introduced, such studies gain greater relevance. At the same time, safeguards are put in place to ensure a degree of objectivity,” adds Francisco Soares Machado.

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