ANNEX II - Costs and charges
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🔗 Back to Summary. 🇫🇷 French Version: 2017R0565_FR.II. Back to Summary of LVL1. Link to the PDF. Direct link to EUR-LEX.
Article I – Minimum list of records to be kept by investment firms depending upon the nature of their ⬅️ | ➡️ Article III – Requirement for operators of trading venues to immediately inform their national competent authority
Identified costs that should form part of the costs to be disclosed to the clients
Table 1
— All costs and associated charges charged for the investment service(s) and/or ancillary services provided to the client that should form part of the amount to be disclosed
Cost items to be disclosed
Examples:
One-off charges related to the provision of an investment service
All costs and charges paid to the investment firm at the beginning or at the end of the provided investment service(s).
Deposit fees, termination fees and switching costs
.
Ongoing charges related to the provision of an investment service
All ongoing costs and charges paid to investment firms for their services provided to the client.
Management fees, advisory fees, custodian fees.
All costs related to transactions initiated in the course of the provision of an investment service
All costs and charges that are related to transactions performed by the investment firm or other parties.
Broker commissions
, entry- and exit-charges paid to the fund manager, platform fees, mark ups (embedded in the transaction price), stamp duty, transactions tax and foreign exchange costs.
Any charges that are related to ancillary services
Any costs and charges that are related to ancillary services that are not included in the costs mentioned above.
Research costs.
Custody costs.
Incidental costs
Performance fees
Switching costs should be understood as costs (if any) that are incurred by investors by switching from one investment firm to another investment firm.
Broker commissions should be understood as costs that are charged by investment firms for the execution of orders.
Table 2
— All costs and associated charges related to the financial instrument that should form part of the amount to be disclosed
Cost items to be disclosed
Examples:
One-off charges
All costs and charges (included in the price or in addition to the price of the financial instrument) paid to product suppliers at the beginning or at the end of the investment in the financial instrument.
Front-loaded management fee, structuring fee
, distribution fee.
Ongoing charges
All ongoing costs and charges related to the management of the financial product that are deducted from the value of the financial instrument during the investment in the financial instrument.
Management fees, service costs, swap fees, securities lending costs and taxes, financing costs.
All costs related to the transactions
All costs and charges that incurred as a result of the acquisition and disposal of investments.
Broker commissions, entry- and exit-charges paid by the fund, mark ups embedded in the transaction price, stamp duty, transactions tax and foreign exchange costs.
Incidental costs
Performance fees
Structuring fees should be understood as fees charged by manufacturers of structured investment products for structuring the products. They may cover a broader range of services provided by the manufacturer.# Table 1 in anx_I
| Nature of obligation | Type of record | Summary of content | Legislative reference |
|---|---|---|---|
| Client assessment | |||
| Information to clients | Content as provided for under Article 24(4) of Directive 2014/65/EU and Articles 44 to 51 of this Regulation | Article 24(4) of Directive 2014/65/EUArticles 44 to 51 of this Regulation | |
| Client agreements | Records as provided for under Article 25(5) of Directive 2014/65/EU | Article 25(5) Directive 2014/65/EUArticle 58 of this Regulation | |
| Assessment of suitability and appropriateness | Content as provided for under paragraphs 2 and 3 of Article 25 of Directive 2014/65/EU and Articles 54, 55 and 60 of this Regulation | Article 25(2) and (3) of Directive 2014/65/EUArticles 54, 55 and 56 of this Regulation | |
| Order handling | |||
| Client order-handling – Aggregated transactions | Records as provided for under Articles 67 to 70 of this Regulation | Articles 24(1) and 28(1) of Directive 2014/65/EUArticles 67 to 70 of this Regulation | |
| Aggregation and allocation of trans-actions for own account | Records as provided for under Article 69 of this Regulation | Articles 24(1) and 28(1) of Directive 2014/65/EUArticle 69 of this Regulation | |
| Client Orders and transactions | |||
| Record keeping of client orders or decision to deal | Records as provided for under Article 74 of this Regulation | Article 16(6) of Directive 2014/65/EUArticle 74 of this Regulation | |
| Record keeping of transactions and order processing | Records as provided for under Article 75 of this Regulation | Article 16(6) of Directive 2014/65/EUArticle 75 of this Regulation | |
| Reporting to clients | |||
| Obligation in respect of services provided to clients | Contents as provided for under Articles 59 to 63 of this Regulation | Paragraphs 1 and 6 of Article 24 and paragraphs 1 and 6 of Article 25 of Directive 2014/65/EUArticles 59 to 63 of this Regulation | |
| Safeguarding of client assets | |||
| Client financial instruments held by an investment firm | Records as provided for under Article 16(8) of Directive 2014/65/EU and under Article 2 of Commission Delegated Directive (EU) 2017/593 | Article 16(8) of Directive 2014/65/EUArticle 2 of Delegated Directive (EU) 2017/593 | |
| Client funds held by an investment firm | Records as provided for under Article 16(9) of Directive 2014/65/EU and under Article 2 of Delegated Directive (EU) 2017/593 | Article 16(9) of Directive 2014/65/EUArticle 2 of Delegated Directive (EU) 2017/593 | |
| Use of client financial instruments | Records provided for under Article 5 of Delegated Directive (EU) 2017/593 | Paragraphs 8, 9 and 10 of Article 16 of Directive 2014/65/EUArticle 5 of Delegated Directive (EU) 2017/593 | |
| Communication with clients | |||
| Information about Costs and associated charges | Contents as provided for under Article 50 of this Regulation | Article 24(4), point (c) of Directive 2014/65/EUArticle 50 of this Regulation | |
| Information about the investment firm and its services, financial instruments and safe-guarding of client assets | Content as provided for under Articles 47, 48 and 49 of this Regulation | Article 24(4) of Directive 2014/65/EUArticles 47, 48 and 49 of this Regulation | |
| Information to clients | Records of communication | Article 24(3) of Directive 2014/65/EUArticle 46 of this Regulation | |
| Marketing communications (except in oral form) | Each marketing communication issued by the investment firm (except in oral form) as provided under Articles 44 and 46 of this Regulation | Article 24(3) of Directive 2014/65/EUArticles 44 and 46 of this Regulation | |
| Investment advice to retail clients | (i) The fact, time and date that investment advice was rendered and (ii) the financial instrument that was recommended (iii) the suitability report provided to the client | Article 25(6) of Directive 2014/65/EUArticle 54 of this Regulation | |
| Investment research | Each item of investment research issued by the investment firm in a durable medium | Article 24(3) of Directive 2014/65/EUArticles 36 and 37 of this Regulation | |
| Organisational requirements | |||
| The firm’s business and internal organisation | Records as provided for under Article 21(1), point (f) of this Regulation | Paragraphs 2 to 10 of Article 16 of Directive 2014/65/EUArticle 21(1), point (f) of this Regulation | |
| Compliance reports | Each compliance report to management body | Article 16(2) of Directive 2014/65/EUArticle 22(2), point (c) and Article 25(2) of this Regulation | |
| Conflict of Interest record | Records as provided for under Article 35 of this Regulation | Article 16(3) of Directive 2014/65/EUArticle 35 of this Regulation | |
| Inducements | The information disclosed to clients under Article 24(9) of Directive 2014/65/EU | Article 24(9) of Directive 2014/65/EUArticle 11, 12 and 13 of Delegated Directive (EU) 2017/593 | |
| Risk management reports | Each risk management report to senior management | Article 16(5) of Directive 2014/65/EUArticle 23(1), point (b) and Article 25(2) of this Regulation | |
| Internal audit reports | Each internal audit report to senior management | Article 16(5) of Directive 2014/65/EUArticle 24 and Article 25(2) of this Regulation | |
| Complaints-handling records | Each complaint and the complaint handling measures taken to address the complaint | Article 16(2) of Directive 2014/65/EUArticle 26 of this Regulation | |
| Records of personal transactions | Records as provided for under Article 29(5), point (c) of this Regulation | Article 16(2) of Directive 2014/65/EUArticle 29(5), point (c) of this Regulation |
Table 1 in anx_II
| Cost items to be disclosed | Examples: |
|---|---|
| One-off charges related to the provision of an investment service | All costs and charges paid to the investment firm at the beginning or at the end of the provided investment service(s). |
| Ongoing charges related to the provision of an investment service | All ongoing costs and charges paid to investment firms for their services provided to the client. |
| All costs related to transactions initiated in the course of the provision of an investment service | All costs and charges that are related to transactions performed by the investment firm or other parties. |
| Any charges that are related to ancillary services | Any costs and charges that are related to ancillary services that are not included in the costs mentioned above. |
| Incidental costs | |
| (1)Switching costs should be understood as costs (if any) that are incurred by investors by switching from one investment firm to another investment firm.(2)Broker commissions should be understood as costs that are charged by investment firms for the execution of orders. |
Table 2 in anx_II
| Cost items to be disclosed | Examples: |
|---|---|
| One-off charges | All costs and charges (included in the price or in addition to the price of the financial instrument) paid to product suppliers at the beginning or at the end of the investment in the financial instrument. |
| Ongoing charges | All ongoing costs and charges related to the management of the financial product that are deducted from the value of the financial instrument during the investment in the financial instrument. |
| All costs related to the transactions | All costs and charges that incurred as a result of the acquisition and disposal of investments. |
| Incidental costs | |
| (1)Structuring fees should be understood as fees charged by manufacturers of structured investment products for structuring the products. They may cover a broader range of services provided by the manufacturer. |