In connection with an investment firm providing investment advice on an independent basis or portfolio management services, what is, with a perspective on Chapter II of the implementing directive,the legal status of a fee, commission or monetary benefit, after it has been received by an investment firm from a third party or a person acting on behalf of a third party as an inducement, and prior to it being transferred in full by the investment firm to the client?

Answer 9

Article 12(1) of the MiFID II Delegated Directive requires that all fees, commissions or any monetary benefits received from a third party, or person acting on behalf of a third party, in relation to the provision of independent investment advice or portfolio management shall be transferred in full to the client. Once it is received by an investment firm from a third party or a person acting on behalf of a third party, and prior to the transfer to the client, the fee, commission or monetary benefit should be considered a liability of the investment firm, which is subject to the obligation in Article 12(1) of the MiFID II Delegated Directive to return the money to the client “as soon as reasonably possible after receipt”.