RIXML.org Quarterly Newsletter

RIXML.org is most grateful to Gabriel Lowy, CEO & Founder, Tech-Tonics Advisors, for his presentation at our June quarterly members meeting, which was very well received by our members. Gabe, as a long standing industry veteran and sell-side research analyst, shared his perspective on new drivers for changing research business models, including:

• Demographics: Gen X, Gen Y & Millennials give rise to the "low-touch", mobile, self-sufficient investor.
• Regulations: Fiduciary "Best Interest" and MiFID II will disrupt the research and delivery process
• Technology: New software development and delivery practices, data integration and management and advanced analytics. It’s all about the user experience.

Goals: Improved product and service quality and adherence with GRC (Governance, Regulatory and Compliance) mandates.

Highlights from the April Meeting

We are very grateful to Tom Conigliaro for presenting "The global impact of Mifid II" at our April meeting. These are pivotal days for the Research business, given the potential regulatory impact on payment models and buy-side administration of subscriptions going forward. We enjoyed an excellent exchange of thoughts among the members and look forward to the evolution of the subject as the year unfolds. Many thanks again to Tom and Markit for the insightful presentation, and to FactSet Research Systems for hosting.

Emerging Technology

Richard Brandt led one call for our Emerging Technology work stream since our last Quarterly Meeting – on May 1st. The group also met for an in-person workshop on June 4th at Jordan & Jordan in New York. Sara Noble updated us on the steps Citi has taken toward the link-back model.

Componentization

RIXML is working on an article illustrating our guidelines for Componentization for posting on the industry blog at Integrity Research. The outline for the article is below:

• How the RIXML organization plans to improve the Research discovery process by recommending a standard method for tagging internal document components.
• Illustrate the problem we expect to address with our componentization standard with the whole document as the sole unit of Research content, the interested party cannot specify in which parts of documents to look for given key words/phrases during a search operation. Additionally, he archive being searched cannot offer results that directly point to the most relevant parts.
• Explain how our componentization standard addresses the problem. Our componentization standard offers finer granularity in addressing content, i.e. sort of a higher-resolution approach to querying and finding the best quality results. It gives the interested party the means of expressing more precisely the material sought. And it gives the party serving the results a framework for focusing the reader’s attention based on relevance.
• Explain the structure of the standard 
  The standard is centered on the component type labels collected from member firms and re-formulated into a canonical list of manageable size. Our guidance documentation lays out the method for applying the labels and advises on how they can be put to good use in the discovery process.
• The first of two examples 
  Show how the standard is used to express a specific search that addresses content not just at the document level, but also at the document component level. This example will make it clear how the component-level addressing pushes higher-quality search results to the top and prunes low quality results.
• The second of two examples 
  Show how the standard is used to draw the reader's attention more directly to the most relevant part of a document from the results set of a search. This example will be akin to a "light box" presentation in that it will both shine a light on a specific part of the document, but maintain the overall context.
• Review the plan forward 
  Talk a bit out the timetable the RIXML organization expects to follow as we complete the development of the standard, conduct a pilot program, and finally issue the production release.
• Offer follow-up 
  Give interested readers a way of learning more, including how to contact the RIXML organization with ideas or questions.

We hope this article helps raise awareness of our work and leads to adoption of the guidelines.

We’re grateful to Integrity Research for the opportunity and for their assistance in editing article drafts.

Link-Back Landscape

Sara continued to lead a publisher forum on linkbacks. The structure of that conversation is outlined below. The following key topics are under review for how RIXML might play a productive role.

• Overview of Research Linkbacks 
  We must address all of the technical challenges integrating digital, publisher-hosted content with vendor platforms.
• Entitlement Types 
  With the rollout of digital content, research publishers may be able to offer content to new audiences in new ways. RIXML can facilitate this through the structure of audience types that enable the display of document elements to different user groups. Entitlement types can be associated with content elements to create distinct user experiences from the same publication.
• Entitlement Synchronization 
  Entitlement synchronization is critical to research linkbacks. It ensures that all users who see a headline on a vendor platform will receive expected publisher-hosted content once the headline is selected.
• Authentication 
  Authentication happens each time a user selects a published report hosted by the broker. We have determined the SAML standard is the protocol brokers have used to authenticate and should become our industry standard.
• Workflow Support 
  There must be a way to identify all common, non-competitive workflows that require static PDF or offline content. We must also create a structure for managing premium workflows agreed between the publisher and the vendor.

It seems clear that some of these topics would benefit from standardization and/or best practices.

We hope RIXML can offer an effective forum for developing standards that make it easier for publishers and vendors to work together.

With many thanks for the contributions of Deirdre Goldenbogen, who oversees our Marketing/Communications efforts, we have stepped up our activity on LinkedIn. Please join our Group, review our "Getting to know RIXML" series and provide feedback on continuous ways to bolster our Outreach efforts.

PLEASE NOTE: This viewpoint is entirely my own and neither the official viewpoint of RIXML.org nor the viewpoint of any of its member organizations.

Given the potential regulatory(MiFID II, et al) impact and the emergence of Buy-Side Research Payment Accounts(RPAs), I am revisiting this topic, since "packaging" will take on greater urgency going forward.

"The Graduate" Redux: Just ONE Word – "Packaging"

Aaaaaaaaaaaaaaah yes. It is that time of the year, just as sure as the early scent of honeysuckle hangs in the air here in the northeast. It is graduation time. I have always liked graduation ceremonies – the formality, the pageantry, the pomp and circumstance (thank you Edward Elgar), and the commencement addresses full of hope and promise and endless clichés.

In terms of age, for those of us that are on the fringes of geezerdom, this time of year we also remember the hallmark 1967 Mike Nichols film, The Graduate, where, recent college graduate Benjamin Braddock, played by a baby-faced Dustin Hoffman, ponders his future, or has it pondered for him, by sitting around the family pool.

Mrs. Robinson aside(not going there), Ben gets no shortage of free advice on his future from family and neighbors at the poolside graduation party, particularly, from L.A. businessman Mr. McGuire, who utters "I just want to say one word to you. Just one word Benjamin - Plastics", implying a career in synthetics would reap great opportunities and rewards.

So... to put a bit of a Graduation-spin on the subject, when we look at the Research space at graduation time in 2015, I might dare to utter to current grads entering the space and past grads in the current space, that one word, in the new world order, could be "Packaging".

In the June 8th Integrity Research Associates blog entitled "Winners and Losers from Proposed MiFID II Research Rules" author Michael Mayhew cites the ramifications and impact on emerging regulatory rules for Research and Buy-Side payment models, potentially resulting in:

• Investment managers will be forced to establish "Research Payment Accounts"(RPAs)for Sell-Side "Priced" Research
• Large investment managers will face increased administrative costs
• Software providers have a commercial opportunity to provide RPAs account management software and services
• Research payments to mid-sized and regional investment banks are likely to be cut

Within RIXML.org, we continue to discuss the drivers for more creative Research delivery and packaging that relate to:

• Increasingly scarce buy-side commissions/urgency for "research discoverability"
• Sell-side research delivery channel strategies/tactics emerging to force payment
• Document centric delivery models moving toward component delivery models
• Buy-side acceptance/use of PDAs, Smart Phones, Apps, Social Networks as the new "tools of the trade" to foster research "eShelf space" competitive models

Despite(or because of) the business challenges, these developments create a very exciting role for RIXML.org to lead efforts in data structure, componentization and tagging models and enablers for research packaging... very exciting indeed.