MiFID_II_EN

16 When a financial institution sells a financial product, it will often receive a fee from the product manufacturer, usually in the form of a commission. Under MiFID II, financial institutions will only be able to receive or pay a commission under strict conditions. Why? Because there is a risk that conflicts of interest may arise. After all, a financial institution might be inclined to offer products that would result in a higher commission for the bank, but be less suitable for the customer. Inducements were already regulated by MiFID I, but those rules are now being considerably tightened. Commissions or other monetary / non-monetary benefits are in prin- ciple prohibited for portfolio management services or investment advice on an independent basis. If a financial institution still receives commissions, it must transfer these commissions to the customer . Commissions or other monetary / non-monetary benefits are allowed for services other than portfolio management or for non-independent investment advice. The condition, however, is that the financial institution can demonstrate that the com- mission benefits the quality of service to the customers, for example by offering the customers digital tools for improving follow-up of their in- vestment portfolio. New rules apply for commissions that financial institutions are allowed to pay or receivewhen providing investment services.What do these commissions involve?