What is the Smartkarma Substantiveness Initiative?

How we aim to provide substantive research to our clients

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Written by Research Team
Updated over a week ago

We are consistently asked by our existing and prospective clients how we ensure that only substantive research appears on the Smartkarma platform. Substantiveness is at the heart of good research and is demanded by our clients. The community standards of our Insight Providers also push for more substantiveness.  We, at Smartkarma, believe that increased Substantiveness will benefit all, therefore, we have introduced the Smartkarma Substantiveness Initiative (SSI). 

It is important to note that this initiative does not alter the QVA framework or drive payments in any way.

What is Substantiveness?

Substantiveness was initially defined by the FCA when research could be paid out of commissions (pre-MIFID II).  The FCA outlined the following areas for research to be considered substantive:

  1. Be capable of adding value to the investment or trading decisions by providing new insights that inform the investment manager when making such decisions about its customers portfolios;

  2. Whatever form its output takes, represent original thought, in the critical and careful consideration and assessment of new and existing facts, and must not merely repeat or repackage what has been presented before;

  3. Have intellectual rigour and must not merely state what is commonplace or self-evident; and

  4. Present the investment manager with meaningful conclusions based on analysis or manipulation of data.

We have taken this as the core of the SSI while adding in items of best practice from authorities globally.

What is the aim of the SSI?

The aims of the initiative are as follows:

  • To provide a transparent objective framework for the assessment of Substantiveness;

  • To categorise written research in a way that allows us to guide Insight Providers and showcase exceptional research;

  • Encourage a general improvement in Substantiveness.

The framework is NOT a fact checking service or a measure of our belief in Insight Providers’ opinions. 

Quality Review Criteria

We then identify four strata of Substantiveness and take action that is appropriate to the strata. We have also identified a few special cases with different treatment. The table below details our approach.


The SSI is supplemental to QVA and QVA remains the driver of payments from the QVA ‘pot’. The SSI will lead to an overall improvement in substantiveness which will in turn drive more client engagement and attract new clients, increasing the size of the overall QVA ‘pot’. The SSI also works to remove items that divert QVA payments away from substantive research. In this way SSI is beneficial to the IP community as a whole. Finally, the SSI works as a handy yardstick to delineate between an Insight and a comment on the platform.

The SSI will lead to a greater interaction between the Smartkarma Research team and the Insight Provider community, to the benefit of all.

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