Starting from 3rd of January 2018, all investment firms are obliged to provide their clients’ with information related to all costs and charges they incurred. Effectively, all clients involved in any trading activity with a regulated EU investment firm must receive a notification (ie. via an email) with all ex-post trade information related to their trading activity.

This only adds to the existing question.

Are investment firms ready to disclose the ex-post information of costs and charges to their clients and comply with all new measures surrounding MiFID II and ESMA?

SALVUS simplified the ex-post trade regulatory requirement by answering 3 questions for EU investment firms.

1. what is the information needed,
2. how often is this information needed,
3. when is this needed.

Question 1: What information are the investment firms required to provide to their Clients?

A. Total Costs and Charges disclosed in the pre-trade Key Information Documents (KIDs) including;

1. One-off costs,
2. Ongoing costs,
3. Incidental fees,
4. All costs related to transactions,
5. Any costs related to ancillary services.

B. Total Costs and Charges need to be graphically displayed and accompanied by the relevant analysis, to display;

1. the effect of the overall costs and charges,
2. any fluctuations in the total historical costs and charges,
3. any expected increase in costs and charges,
4. a detailed description of the graphical illustration.

C. Total Costs and Charges need to be expressed in monetary terms​ and as percentages​.

Question 2: How often the investment firms are required to provide such information to their Clients?
The investment firms have regulatory reporting obligation to send this information to Clients, at least once a year. ESMA advises to provide this information more frequently (ie. quarterly) for greater transparency between clients and investment firms.

Question 3: When are the investment firms required to provide such information to their Clients?
The investment firms are required to provide such information 12 months after commencement of the relationship with the client. In a case, where a relationship ends during the year, the investment firms are required to provide the information at the termination point.

The information provided in this article is for general information purposes only. You should always seek for professional advice suitable to your needs.