What changed, Commission Delegated Directive (EU) 2017/593 of 7 April 2016 supplementing Directive 2014/65/EU

+ **1.** Member States shall ensure that investment firms that operate a separate research payment account as referred to in Article 24(9a), point (d)(ii), of Directive 2014/65/EU, meet the following conditions relating to the operation of the account:(a) the research payment account is funded by a sp…
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+ **1a.** Member States shall ensure that investment firms that make use of a research payment account as referred to in paragraph 1 provide the following information to their clients:(a) before providing investment services to their clients, information about the budgeted amount for research and the …
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+ **2.** Member States shall ensure that investment firms that choose to pay separately for execution services and research and that operate a research payment account as referred to in paragraph 1, shall provide, upon request of their clients or of competent authorities all of the following:(a) a lis…
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+ For the purposes of paragraph 1, point (a), Member States shall ensure that the estimated research charge is:
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+ (a) only based on a research budget set by the investment firm for the third-party research necessary for the provision of investment services to the clients of that investment firm;
− **1.** Member States shall ensure that the provision of research by third parties to investment firms providing portfolio management or other investment or ancillary services to clients shall not be regarded as an inducement if it is received in return for either of the following:(a) direct payments…
+ (b) not linked to the volume or value of transactions executed on behalf of the clients.
− With regard to point (b) of the first subparagraph, where an investment firm makes use of the research payment account, it shall provide the following information to clients:
+ **3.** Member States shall ensure that investment firms that choose to pay separately for execution and research services and that operate a research payment account as referred to in paragraph 1:(a) indicate, for every operational arrangement for the collection of the client research charge, a sepa…
− (a) before the provision of an investment service to clients, information about the budgeted amount for research and the amount of the estimated research charge for each of them;
+ **4.** Member States shall ensure that investment firms that choose to pay separately for execution services and research and that operate a research payment account as referred to in paragraph 1 do not receive a total amount of research charges that exceeds their research budget.
− (b) annual information on the total costs that each of them has incurred for third party research.
+ **5.** Member States shall ensure that investment firms that choose to pay separately for execution services and research and operate a separate research payment account as referred to in paragraph 1 agree with their clients, in their management agreement or general terms of business, the research c…
− **2.** Where an investment firm operates a research payment account, Member States shall ensure that the investment firm shall also be required, upon request by their clients or by competent authorities, to provide a summary of the providers paid from this account, the total amount they were paid ov…
+ Member States shall ensure that investment firms only increase their research budget after they have provided their clients with clear information about such intended increases.
− **3.** Every operational arrangement for the collection of the client research charge, where it is not collected separately but alongside a transaction commission, shall indicate a separately identifiable research charge and shall fully comply with the conditions set out in point (b) of the first su…
+ Member States shall ensure that investment firms have a process to refund any surplus in the research payment account at the end of a period to their clients or to offset it against the research budget and charge calculated for the following period.
− **4.** The total amount of research charges received may not exceed the research budget.
+ **6.** Member States shall ensure that investment firms that choose to pay separately for execution and research services and that operate a research payment account as referred to in paragraph 1, are solely responsible for the management of the research budget referred to in paragraph 1, point (b).
− **5.** The investment firm shall agree with clients, in the firm's investment management agreement or general terms of business, the research charge as budgeted by the firm and the frequency with which the specific research charge will be deducted from the resources of the client over the year. Incr…
+ Member States shall ensure that the research budget referred to in paragraph 1, point (b) is based on a reasonable assessment of the need for third party research.
− **6.** For the purposes of point (b)(ii) of the first subparagraph of paragraph 1, the research budget shall be managed solely by the investment firm and shall be based on a reasonable assessment of the need for third party research. The allocation of the research budget to purchase third party rese…
+ Member States shall ensure that the allocation of the research budget to purchase third party research is subject to the investment firm’s controls and senior management oversight that are deemed objectively appropriate to ensure that the research budget is managed and used in the best interests of …
− **7.** For the purposes of point (b)(iii) of paragraph 1, the investment firm may delegate the administration of the research payment ac-count to a third party, provided that the arrangement facilitates the purchase of third party research and payments to research providers in the name of the invest…
+ **7.** For the purposes of paragraph 1, point (c), Member States shall ensure that investment firms may delegate the administration of the research payment account to a third party, provided that such arrangement facilitates the purchase of third-party research and the payment to research providers …
− **8.** For the purposes of point (b) (iv) of paragraph 1, investment firms shall establish all necessary elements in a written policy and provide it to their clients. It shall also address the extent to which research purchased through the research payment account may benefit clients' portfolios, in…
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+ **10.** Member States shall ensure that, irrespective of how investment firms pay for execution and research services, they base their annual assessment of the research, required under Article 24(9a), point (c), of Directive 2014/65/EU, on robust quality criteria enabling firms to objectively assess…
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+ Member States shall ensure that investment firms take the necessary remedial actions where assessments reveal a lack of quality, usability, value of the research or lack of contribution of the research to a better investment decision.