MiFID II Costs & Charges Workshop 4th September 2019 Jeffrey - - PowerPoint PPT Presentation

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Oct 31, 2023 169 likes •291 views

MiFID II Costs & Charges Workshop 4th September 2019 Jeffrey Mushens Technical Policy Director, TISA 1. What is Costs & Charges? What the Directive says Who it affects What it covers When it has to be done What has to

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MiFID II Costs & Charges Workshop

4th September 2019

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Jeffrey Mushens

Technical Policy Director, TISA

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www.tisa.uk.com 3

1. What is Costs & Charges?
What the Directive says
Who it affects
What it covers
When it has to be done
What has to be done

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www.tisa.uk.com 4

2. What the Directive says
Article 24(4)
The information about all costs and charges, including costs and charges in connection with the investment service and

the financial instrument, which are not caused by the occurrence of underlying market risk, shall be aggregated to allow the client to understand the overall cost as well as the cumulative effect on return of the investment, and where the client so requests, an itemised breakdown shall be provided. Where applicable, such information shall be provided to the client on a regular basis, at least annually, during the life of the investment

Article 50 of the Delegated Regulation
The aggregated costs and charges shall be totalled and expressed both as a cash amount and as a percentage.

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3. Who it affects
MiFID businesses
Some UCITS firms are not MiFID businesses, but their

customers may be

Product manufacturers
Platforms
Advisers

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4. What it covers
Pre sale disclosure (ex ante)
Post sale disclosure (at least annually), but
Portfolio management services clients at least

quarterly (see Article 60 Delegated Regulation)

All costs

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5. What are all costs?
See Appendix 1

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6. When it has to be done
ex ante -Appropriate information shall be provided

in good time to clients or potential clients

ex post -such information shall be provided to the

client on a regular basis, at least annually, during the life of the investment

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7. What has to be done
All costs and charges, shall be aggregated
Cumulative effect on return of the investment where the

client so requests, an itemised breakdown shall be provided.

At least annually
The aggregated costs and charges shall be totalled and

expressed both as a cash amount and as a percentage.

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8. Some current issues
Cumulative effect of charges on returns
Calculation of transaction costs
Arrival price methodology (implicit costs/slippage, half spread,

etc)

Dilution levy
What happens when the fund manager is outside the EEA?
Property funds.
ESMA call for evidence.

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TISA Dakota House, 25 Falcon Court Preston Farm Business Park STOCKTON-ON-TEES TS18 3TX