ERDEM-NEWSLETTER-2018-metin

198 NEWSLETTER 2018 enhancing the quality of service provided to a client, and are of a scale and nature such that they could not be judged to impair compliance with the investment firm’s duty to act in the best interest of the client must be clearly disclosed and are excluded from that point onward. Research Unbundling According to this rule, research provided by any third party to an investment firm within the EU shall be regarded as an inducement and subject to the above-mentioned ban, unless the research is either directly paid from the EU investment firm’s own funds, or paid from a separate research payment account funded by a research charge to individual clients. In this context, firms should not accept research for free. Consequently, the business partners within the EU may roll out new policies regarding the provision or receipt of research and other services due to the unbundling rule that the MiFID II brings. Best Execution Requirements MiFID II imposes best execution requirements on the markets wherein the transactions are executed at and on the firms that execute orders on behalf of their investors. When executing orders, investment firms should take all sufficient steps to obtain the best possible result for their clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature, or any other consideration rel- evant to the execution of the order. The firms must publicly disclose best execution data related to their pricing structures and disclose pre- scribed information on commissions, execution costs, and research- related expenses to their clients. Even third country firms are not di- rectly subject to the best execution requirement, and non-compliance with this requirement provides a competitive disadvantage. Revised policies complying with the best execution rule should also be ex- pected from the business partners within the EU.