An example of this is that under MiFID II the ban on inducements also is - partially - applicable to services provided to professional investors and eligible counterparties. The ban on inducements applies to services provided to professional investors and eligible counterparties when it concerns individual portfolio management and independent advice. The requirements regarding paying and receiving inducements have been tightened for other forms of services provided to professional investors and eligible counterparties. For instance, the inducements must enhance the quality of the service and they may not harm the client's interest.
In addition, under MiFID II strict conditions apply for receiving research. Research qualifies, in principle, as an inducement unless the investment firm pays for the research in a certain manner (see below). When research is qualified as an inducement, this means that the research may not be received if the ban on inducements applies. If this ban does not apply (for example, when non-independent advice is provided to a professional investor, see above), stricter requirements apply for paying and receiving research.
The investment firm can pay for the research from its own funds; however, it may also charge the research to its clients. When the investment firm chooses to have its clients pay for the research, it can do this in two ways: charge the costs of the research directly to the client (via a separate invoice), or charge this by means of a surcharge on the transaction costs. Strict requirements apply to the last option. For instance, the amount that is charged for research must be based on the budget that the company has determined for this. Moreover, the amount may never depend on the transaction volume and/or the value of the executed transactions.