Recital 4

(4) In order to revitalise the market for investment research and to ensure sufficient research coverage of companies, in particular for small- and middle-capitalisation companies, the research unbundling rules need to be further adjusted to offer investment firms more flexibility in the way that they choose to organise payments for execution services and research, thus limiting the situations where separate payments might be too cumbersome. Accordingly, the market capitalisation threshold for companies for which the re-bundling of payments for execution services and research is possible should be removed to allow investment firms to proceed in the way they find most appropriate in terms of payments for execution services and research. Doing so would, however, require transparency vis-à-vis clients as to the choice of payment method. Investment firms should therefore inform their clients whether they apply a separate or joint payment method for the provision of execution services and third-party research. The choice of an investment firm as to whether to apply separate or joint payments for execution services and research should be made in compliance with the investment firm’s policy. That policy should be provided to clients and should indicate, depending on the method of payment selected by the firm, the type of information on costs attributable to third-party research. In the case of joint payments for execution services and research, clients should be entitled to receive, upon request and on an annual basis, information on the total costs attributable to third-party research provided to the investment firm, if known to the firm. The investment firm’s policy on separate or joint payments should also include information on the measures in place to prevent or manage the conflicts of interest arising from the use or delivery of third-party research to clients while providing investment services to those clients. Regardless of the selected payment method, the investment firm should also perform an assessment of the quality, usability and value of the research it uses to ensure that such research contributes to enhancing the investment decision process of the firm’s clients, where that research is distributed directly to them or where used by the portfolio management services of the firm. Sales and trading commentary comprises analyses of market conditions, trading and trade execution ideas, trade execution management tools and other bespoke analyses related to executing a trade in financial instruments. Such sales and trading commentary is incidental to the execution of transactions in financial instruments as it allows investment firms offering execution services to demonstrate the quality of the execution they achieve for their clients. Therefore, sales and trading commentary cannot be separated from execution services and should not be considered investment research.

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Source: EUR-Lex (Cellar) · retrieved 2026-10-16 · Text as adopted (Official Journal); later amendments are not incorporated in this text.