MiFID II Inducements

Introduction

MiFID II brings with it many challenges, one of which is the new set of requirements dealing with inducements which aims to strengthen the protection of investors and increase clarity to clients as to the quality of services they receive. The core requirements underpinning the MiFID II inducements regime remains the same as they were under MiFID I, namely:

• the obligation to act honestly, fairly and professionally in accordance with the best interests of the clients;
• the conflicts of interest provisions; and
• the disclosure obligations.

However, the MiFID II regime goes much further that that under MiFID I as:

• it requires firms, where applicable, to inform the client on mechanisms for transferring to the client the fee, commission or monetary or non-monetary benefit received in relation to the provision of the investment or ancillary service;