Revolutionary European rules separating payments for investment research from trade execution costs are set to spark a battle between top banks and brokers for a slice of the $1.35bn-a-year market — but firms are holding fire for now.

With the European Union's revised Markets in Financial Instruments Directive set to overhaul trading, Bank of America Merrill Lynch, Exane BNP Paribas, JPMorgan, Morgan Stanley, and UBS look "well positioned" to compete in the new landscape, according to a report today by consultancy Greenwich Associates.