Changes to MiFID Conduct and Organisational requirements: What we know


What you need to know about the changes to MiFID Conduct and Organisational requirements

These changes will apply to:  

  • Investment firms and market operators in the UK.
  • Banks and operators of Collective Investment Scheme who provide investment services.
  • Article 3 Exempt firms.
  • Unauthorised persons providing research.


  • The key changes to MiFID will be the addition of several research categorises with a list of minor non-monetary benefits.
  • These research categories will no longer constitute inducement and thus be excluded from the inducements rule.
  • The costs of these exempted research categories can therefore be re-bundled. 
    The FCA is not mandating the use of these exemptions: if re-bundling costs are burdensome for firms, they may choose not to apply the changes.
  • These changes eliminate the need to pay for the exempted research out of a research payment account (RPA) funded through specific research charges to the client.
  • The following rules will be implemented from 1st March 2022:
    1. ‘openly available’ research: will be regarded as a minor non-monetary benefit for the inducement rules, subject to firms taking reasonable steps to limit circulation where this is necessary; “openly available” describes research accessible without conditions or barriers such as a log-in, sign up, or submission of user information.
    2. FICC instruments: Research primarily related to FICC instruments, received by firms providing investment services or ancillary services to clients where it relates to FICC instruments, will be exempted from the inducement rules for third party research. This exemption does not apply to macro-economic research.
    3. Research on SME’s below a £200m market capitalisation will be exempt. Research on SME’s falling below this threshold is to be provided to asset managers on a bundled basis (or for free).
    4. Research providers who do not provide execution or brokerage services and do not operate within a financial services group where any group member provides such services will be exempt from inducement rules. 

Reports linked to best execution

The following reporting requirements will be abolished from 1st December 2021 

  1. RTS 27 reporting – previously obliging execution venues to publish a report on a variety of execution quality metrics. 
    -Firms are exempt from producing RTS27 reports for the remainder of 2021
  2. RTS 28 reporting – previously obliging investments firms executing orders to produce an annual report of the top 5 venues utilised and a summary of execution outcomes achieved. 
    -Firms must continue to provide retail clients with a summary of their execution policy, and regularly assess the effectiveness of its execution arrangements and policy to produce the best results for clients. 

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