--- title: "ESMA Q&A 1789 — Q&A — Inducements [Answer Published]" shortTitle: "ESMA Q&A 1789 — Q&A — Inducements [Answer Published]" answer_id: ESMA_QA_1789 topic: "Inducements" status: "Answer Published" type: qa instrument_type: qa authority: ESMA binding: false binding_character: non_binding legal_status: in_force regulation: "MiFID II" mifid_level3: true mica_level2: false legal_basis: "MiFID II" date: 10 October 2016 source_link: https://www.esma.europa.eu/publications-data/questions-answers/1789 lifecycle: "Answer Published" text_version: "ESMA Q&A register, 10 October 2016" source_url: "https://www.esma.europa.eu/publications-data/questions-answers/1789" check_status: matched verified: true last_checked: 2026-10-26 checked_against: "the ESMA publication" source: prepared_by: "ESMA" published_by: "ESMA" published_in: "ESMA Q&A tool" evidence: prepared_by: "ESMA Answer" locator: "ESMA Q&A entry ESMA_QA_1789: field 'ESMA Answer', no 'Answer provided by' line" document_type: "qa_answer" legal_nature: "not_legislation" addressees: "not stated in the document" dates: published_on: "2016-10-10" question_submitted_on: "2016-10-10" locators: published_on: "ESMA Q&A Excel export ESMA_QA_1789, column 'Esma responses', date line" question_submitted_on: "ESMA Q&A Excel export ESMA_QA_1789, column 'Date of submission'" lifecycle_label: "Answer Published" --- **Answer by ESMA, published in its Q&A tool · not legislation · published 10 Oct 2016 [Answer Published]** *Answer Published · ESMA Q&A register, 10 October 2016 · Checked against the ESMA publication on 26 Oct 2026 · [Official source](https://www.esma.europa.eu/publications-data/questions-answers/1789)* | | | |---|---| | **Full title** | ESMA Q&A 1789 — Q&A — Inducements \[Answer Published\] | | **Prepared by** | ESMA | | **Published by** | ESMA, in the ESMA Q&A tool | | **Reference** | ESMA_QA_1789 | | **Document type** | Q&A | | **Legal nature** | Not legislation | | **Addressees** | Not stated in the document | | **Dates** | Published 10 October 2016; question submitted 10 October 2016 | | **Legal basis** | MiFID II | | **Related instruments** | None recorded | | **Text on this page** | Word for word — the full text of the ESMA publication | **Inducements** ### Question When a firm is using a research payment account under Article 13 of the MiFID II Delegate Directive, can the research budget required under Article 13(1)(b)(ii) and 13(2)(a) be set for more than one client’s portfolio when determining the specific research charge to a client and establishing the need for third party research? *** ### Answer \[ESMA 35-43-349 MiFID II Q&As on Investor protection, Ch. 7, question 1\] While a research payment account (RPA) can only be funded by a specific research charge to the client, which must be based on a research budget set by the firm, ESMA considers that a budget can be set for a group of client portfolios or accounts where the firm has established a similar need for third party research in respect of the investment services rendered to its clients. This would allow a firm providing investment services to set a research budget at a desk or investment strategy level, for example, if client portfolios have sufficiently similar mandates and investment objectives such that investment decisions relating to those portfolios are informed by the same research inputs. A firm should be able to clearly evidence and demonstrate its approach to setting and managing a budget for a given group of client accounts and that it is consistent with using the budget in the best interests of its clients, as required by Article 13(6) of the MiFID II Delegated Directive. A firm should also describe its approach in a written research policy provided to its clients under Article 13(8) of the MiFID II Delegated Directive. A firm is still required to identify a specific research charge for individual clients to fund the RPA, even where a budget is set for several portfolios. A firm will therefore need to have a transparent method for making a fair allocation of costs in such cases. This may involve the firm pro-rating the cost of the research budget across all client accounts benefitting from it based, for example, on the value of each client’s portfolio, to establish a specific charge for individual clients. Firms should not set a budget for a group of client portfolios or accounts that do not share sufficiently similar investment objectives and research needs. For example, if portfolios have material differences in the types of financial instruments and / or geographic regions or market sectors they can invest or are invested in, such that their research needs and the potential costs of acquiring those inputs are different, they should not be subject to the same research budget. This would not allow the firm to ensure a budget is used in the best interests of clients and may result in an unfair allocation of the costs, or benefits derived from research purchased, between different sets of clients. A firm may also choose to set a firm-level research budget to help it control overall costs, but this does not replace the need to set budgets for discrete groups of client portfolios and accounts as described above. *** **Source:** [ESMA original document](https://www.esma.europa.eu/publications-data/questions-answers/1789)