Fidelity International’s decision on how to handle its research costs to meet new European rules hinges on how the U.S. deals with the regulations.

“The one sticking point is the U.S. because the U.S. securities industry doesn’t get pushed around by anybody,” said Richard Lewis, head of global equities at Fidelity International, which manages $383 billion in assets. “We’ll have to wait and see what the U.S. regulators come up with.”

Bloomberg News

One quandary with the European Union’s revised Markets in Financial Instruments Directive, known as MiFID II, is the requirement that brokerages are paid directly for research — that conflicts with U.S. rules.

The SEC has signaled to brokerages that it has increased efforts to find a solution before Europe’s rules take effect in January.

While the SEC does its due diligence, some of the world’s largest money managers have started to make independent decisions. BlackRock, Vanguard and Schroders have said they would absorb research expenses.

Fidelity is weighing between its preferred choice of having a global research base to meet MiFID II, or having two separate pools of clients and research, Lewis said.

The rules which come into force in January aim to tackle conflicts of interest by requiring money managers and hedge funds to be charged separately from trading fees. Lewis declined to comment if Fidelity would bill clients for research or absorb the costs.

The rules aren’t just confined to within Europe and have a global reach including in Asia, much to the chagrin of his colleagues, he said.

Bloomberg News