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Version date: 10 October 2016 - onwards

Question 1 Use of a Research Payment Account for more than one client's portfolio or account [Last update: 10 October 2016]

Art. 24 of MiFID II Art. 13 of the MiFID II Delegated Directive

When a firm is using a research payment account under Article 13 of the MiFID II Delegate Directive, can the research budget required under Article 13(1)(b)(ii) and 13(2)(a) be set for more than one client’s portfolio when determining the specific research charge to a client and establishing the need for third party research?

Answer 1

While a research payment account (RPA) can only be funded by a specific research charge to the client, which must be based on a research budget set by the firm, ESMA considers that a budget can be set for a group of client portfolios or accounts where the firm has established a similar need for third party research in respect of the investment services rendered to its clients.

This would allow a firm providing investment services to set a research budget at a desk or investment strategy level, for example, if client portfolios have sufficiently similar mandates and investment objectives s

Comparing proposed amendment...