What UK Heads of Trading & Dealing Teams Must Know About CSA Resurgence 

From MiFID II to PS24/9 & PS25/4: Why This Matters Now 

If you’re a Head of Trading or Head of Dealing in the UK, chances are you haven’t had to think about research payments for nearly eight years (for better or worse). Back in January 2018, when MiFID II came into force across the EU, most asset managers decided to pay for research directly from their own resources or P&L. That decision effectively removed trading desks from the research payment conversation. 

For years, the focus has been squarely on execution quality, best-ex‑, and managing broker relationships. Research budgets? CSA agreements? Negotiating commission splits? Those became relics of a past era. 

Now, with the FCA introducing research payment optionality, the landscape has shifted again. UK buyside firms can once more fund research through trading commissions. That means Commission Sharing Agreements (CSAs) are back as an option, and trading desks will once again be responsible for managing them. 

Why Heads of Trading Should Lean In 

The FCA’s new payment optionality brings trading desks back into a role they’re uniquely equipped to lead; shaping how research is funded and delivered.  This shift gives Heads of Trading a chance to reassert commercial influence, strengthen broker relationships, and bring greater transparency to how research supports investment performance.

With CSAs returning, trading leaders can set the tone by negotiating fair and efficient commission rates, and ensuring accruals stay aligned with research budgets. These aren’t just operational tasks; they’re levers that can improve execution quality, enhance research value, and demonstrate strong governance to clients and regulators.

In short: the front office is back in the research payment business. And for Heads of Trading, that means a renewed opportunity to lead, shape, and elevate how their firms extract value from the research ecosystem.

FCA Guardrails for New Research Payment Optionality 

The FCA has taken a notably flexible approach to reintroducing CSAs under Payment Optionality. While the rules are far lighter than the old research payment agreement regime, there are still important guardrails firms need to observe. Some responsibilities will reside with trading, others with the investment or operations side but the good news is that most of these requirements can be efficiently managed through Castine or comparable systems.

• Written Policy: Firms must maintain a formal policy governing the use of joint payments, covering governance, decision-making, and controls. This policy must ensure separation from trade execution processes. 
• Budgeting: Firms are required to set an annual research budget based on anticipated research needs, not transaction volumes or values. The final rules permit flexibility, allowing building wallets aligned with a firm’s investment process, products, and client base rather than strictly at the strategy or client-group level. 
• Separately Identifiable Research Prices: Instead of mandating written contracts with research providers, the FCA requires documented “arrangements” that define how research costs are calculated and itemized within bundled charges. These arrangements may be bilateral or multilateral, negotiated or standardized, and must be physically or electronically recorded. 
• Periodic Assessments: At least once a year, firms must evaluate the value, quality, and utility of purchased research, ensuring it contributes meaningfully to investment decisions. Charges must also be benchmarked against comparable services to confirm reasonableness. 
• Research Cost Allocation: Costs of research funded through bundled payments must be allocated fairly among clients. The rules provide flexibility in determining the proper level for allocation, consistent with the budgeting guardrail. 
• Payment Allocation Structure: Firms must design a framework for distributing payments among different research providers, including both full-service brokers and independent providers. 
• Procedures: Firms must implement procedures to administer accounts used for research purchases funded by bundled payments. 
• Disclosures: Clients must receive clear disclosures outlining the firm’s bundled payment approach, the types of research providers engaged (e.g., independent or broker-affiliated), and the associated costs. 

Strategic Implications

• Renewed Broker Dialogue: Broker negotiations now include research value. Research evaluation was part and parcel of paying for research out of P&L; these continue as best practices under CSAs. Expect deeper conversations with brokers about both execution quality and research provision. 
• Budget Discipline: Turning off CSA accruals at the right time is not optional; it’s a governance requirement. Heads of Trading must be disciplined in monitoring budgets and accruals. Of course, Castine provides all the reporting around this.
• Competitive Positioning: Firms that adapt, with clear CSA frameworks and budget controls, will be in a position for all the benefits associated with the new payment optionality. 

The Bigger Picture 

The FCA’s PS24/9 & PS25/4 is not just a regulatory change; it’s a return to active responsibility for research funding. After nearly eight years of dormancy, CSA mechanics are back, and trading desks must be ready to operate them with clarity and control.  

For Heads of Trading, this is both a challenge and an opportunity. Get it right, and you’ll build stronger broker relationships, improve research value, and demonstrate governance excellence. 

That’s exactly why Castine’s Educational CSA Webinar series was created; to equip Heads of Trading and their teams with the practical knowledge, operational confidence and real-world examples they need to navigate this transition smoothly and lead from the front. Combine that with Castine’s industry-leading CSA solutions and you’re fully prepared to welcome CSAs back with clarity control and confidence!

FCA PS24/9 & PS25/4 Research Payment Optionality Best Practice Do’s and Don’ts: 

Closing Thought 

The FCA has given UK firms real flexibility: they can choose either bundled or unbundled research payments. With this flexibility comes a renewed role for trading desks, but it’s not a burden. For Heads of Trading, it’s simply a chance to re-engage in an area where your market knowledge already makes a meaningful difference: shaping how research is paid for, aligned, and optimized.

After nearly eight years of operating without CSAs, trading desks have a unique opportunity around reimplementing the mechanics of research funding. The desks that embrace this change, by negotiating smartly, managing budgets carefully, and controlling accruals with discipline will not only stay compliant but also position themselves as leaders in a new era of trading governance. 

Important takeaways for UK Heads of Trading and Heads of Dealing: 

• CSA Agreements Are Back:Re-engage brokers to sign and manage CSA agreements, ensuring terms align with FCA guardrails. 
• Commission Negotiations Matter:Execution rates now include research tack‑ons. Benchmark carefully and negotiate with transparency. 
• Budget Discipline Is Critical:Set clear annual research budgets and monitor accruals closely. Know exactly when to turn off CSA accruals to avoid over‑collection and regulatory risk. 
• Governance and Disclosure Are Non‑Negotiable:Document decisions, coordinate with compliance, and disclose costs transparently to clients. 
• Operational Readiness Is Essential:Update systems, workflows, and team training to handle CSA balances and cut‑offs effectively. 
• Cross‑Border Awareness:Manage hybrid models across UK optionality and EU unbundling without disrupting client execution. 

For trading leaders, the FCA’s new research payment optionality is not just a regulatory update, it’s a strategic reset. Those who act decisively will demonstrate control, transparency, and foresight, strengthening both client trust and broker relationships. Those who delay risk compliance breaches, operational missteps, and reputational damage.  

How Castine Can Help 

Castine’s technology solutions take the complexity out of CSA management. From budget tracking to FCA compliance, our technology ensures research payments are handled smoothly while trading desks stay focused on performance.   

To learn more about how Castine can help you implement CSA payment optionality with confidence, or to arrange a demo, please contact us today. 

John McGough 

Castine – Global Head of Business Development 

[email protected] 

646-455-9891 – Direct