Saxo Bank A/S cannot pay inducements to IBs providing discretionary portfolio management to the customers or independent advice, as of July 1, 2017.
MiFID II is currently on top of the agenda for investment firms in Europe. FinanceFeeds has been informing its readers on the latest developments concerning the implementation of the rules and the solutions to help companies comply with the new requirements. One of the key dates in this respect is January 3, 2018 – the date when the MiFID II rules come into force.
One of the provisions of MiFID II bans investment companies from receiving and keeping any fees, commissions or other payments in money or in kind from (inter alia) investment funds in connection with the provision of discretionary portfolio management to the customers. This particular rule, known as a ban on IB inducements, will come into force earlier in Denmark – on July 1, 2017.
Saxo Bank is implementing measures to comply with the new requirements.
In line with the new rules, Saxo Bank A/S cannot pay inducement to IBs providing discretionary portfolio management to the customers or independent advice, as of July 1, 2017. The company plans to implement a selection of solutions that will enable its IBs to work within certain boundaries or move to a non-inducement fee model.
All IBs will be contacted by their Account Manager within the next weeks and will be provided with more detailed information with regards to their own situation.
Saxo Bank explains that the ban does not apply to payments in kind of minor value, which may increase the quality of the service provided to the customer, and which cannot prevent the investment company in question from complying with its duty to act in the customer’s best interest.
According to the Danish Regulation the companies that are not allowed to receive and keep any fees etc. in connection with provision of discretionary portfolio management to the customers and independent advice include: banks, investment firms, and investment management companies with authorizations as investment firms.
Apart from the above mentioned cases, companies are allowed to pay or receive a fee or commission in connection with the provision of an non-independent investment services or an ancillary service, if the payment aims to improve the quality of the relevant service to the client and does not counteract with the company’s duty to act honest, fairly and professionally in accordance with the best interest of its clients.