LONDON, April 10 Reuters Asset managers in Britain will be allowed to combine the cost of research on stock picks and execution of stock trades charged by brokers, the Financial Conduct Authority proposed on Wednesday, in a postBrexit easing of rules inherited from the EU.

The European Union is also introducing more flexibility into how asset managers pay for research.

Currently the costs of research and execution of stock trades charged by brokers have to be itemised to show clients of asset managers what their fees cover to help measure value for money.

Critics argue it has led to far less research on smaller companies, with a knock on effect on investment and level of trading, a view disputed by the FCA and its EU counterpart ESMA.

Britain39;s exit from the EU in 2020 allows it to write its own financial rules as it seeks to beef up its attraction as a capital market that now faces competition from EU financial centres as well as New York.

Rolling back the EU39;s unbundling rule in the bloc39;s MiFID II securities laws, has long been seen as a 39;Brexit dividend39; and proposed under the British government39;s 39;Edinburgh Reforms39; to improve London39;s competitiveness as a global financial centre.

The government commissioned City lawyer Rachel Kent to look into easing the bundling rules, and she recommended last year giving more optionality into how research is paid for.

The FCA said its analysis showed that asset managers are largely getting the research…