Requirement (MIFID)
Article 26 Inducements
Requirements MIFID - DIRECTIVE 2006/73/EC
Description
Description
Member States shall ensure that investment firms are not
regarded as acting honestly, fairly and professionally in
accordance with the best interests of a client if, in relation to
the provision of an investment or ancillary service to the client,
they pay or are paid any fee or commission, or provide or are
provided with any non-monetary benefit, other than the
following:
(a) a fee, commission or non-monetary benefit paid or
provided to or by the client or a person on behalf of the
client;
(b) a fee, commission or non-monetary benefit paid or
provided to or by a third party or a person acting on
behalf of a third party, where the following conditions are
satisfied:
(i) the existence, nature and amount of the fee,
commission or benefit, or, where the amount cannot
be ascertained, the method of calculating that amount,
must be clearly disclosed to the client, in a manner
that is comprehensive, accurate and understandable,
prior to the provision of the relevant investment or
ancillary service;
(ii) the payment of the fee or commission, or the
provision of the non-monetary benefit must be
designed to enhance the quality of the relevant service
to the client and not impair compliance with the
firm's duty to act in the best interests of the client;
(c) proper fees which enable or are necessary for the provision
of investment services, such as custody costs, settlement
and exchange fees, regulatory levies or legal fees, and which,
by their nature, cannot give rise to conflicts with the firm's
duties to act honestly, fairly and professionally in
accordance with the best interests of its clients.
Member States shall permit an investment firm, for the purposes
of point (b)(i), to disclose the essential terms of the arrangements
relating to the fee, commission or non-monetary benefit in
summary form, provided that it undertakes to disclose further
details at the request of the client and provided that it honours
that undertaking.
Comment
Applies to Article 19(1) of Directive 2004/39/EC