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published 6 Jun 2017 [Answer Published]","attribution":{"prepared_by":"ESMA","published_by":"ESMA","published_in":"ESMA Q&A tool","document_type":"qa_answer","legal_nature":"not_legislation","addressees":"not stated in the document","dates":{"published_on":"2017-06-06","question_submitted_on":"2017-06-06","locators":{"published_on":"ESMA Q&A Excel export ESMA_QA_1826, column 'Esma responses', date line","question_submitted_on":"ESMA Q&A Excel export ESMA_QA_1826, column 'Date of submission'"}},"adoption":null}},"provenance":{"official_url":"https://www.esma.europa.eu/publications-data/questions-answers/1826","check":{"result":"matched","checked_at":"2026-10-26","against":"the ESMA publication"},"repo_path":"spaces/mifid-ii/level-3/q-and-a/esma/esma-qa-1826-information-on-cost-and-charges.md","body_sha256":"ef5f90b3784e5895d06199dc683920d5c2d71adecfdb156905fbf6a81ec80ecb"},"units":[],"markdown":"---\ntitle: \"ESMA Q&A 1826 — Q&A — Information on cost and charges [Answer Published]\"\nshortTitle: \"ESMA Q&A 1826 — Q&A — Information on cost and charges [Answer Published]\"\nanswer_id: ESMA_QA_1826\ntopic: \"Information to clients on costs and charges\"\nstatus: \"Answer Published\"\ntype: qa\ninstrument_type: qa\nauthority: ESMA\nbinding: false\nbinding_character: non_binding\nlegal_status: in_force\nregulation: \"MiFID II\"\nmifid_level3: true\nmica_level2: false\nlegal_basis: \"MiFID II\"\ndate: 6 June 2017\nsource_link: https://www.esma.europa.eu/publications-data/questions-answers/1826\nlifecycle: \"Answer Published\"\ntext_version: \"ESMA Q&A register, 6 June 2017\"\nsource_url: \"https://www.esma.europa.eu/publications-data/questions-answers/1826\"\ncheck_status: matched\nverified: true\nlast_checked: 2026-10-26\nchecked_against: \"the ESMA publication\"\nsource:\n  prepared_by: \"ESMA\"\n  published_by: \"ESMA\"\n  published_in: \"ESMA Q&A tool\"\n  evidence:\n    prepared_by: \"ESMA Answer\"\n    locator: \"ESMA Q&A entry ESMA_QA_1826: field 'ESMA Answer', no 'Answer provided by' line\"\ndocument_type: \"qa_answer\"\nlegal_nature: \"not_legislation\"\naddressees: \"not stated in the document\"\ndates:\n  published_on: \"2017-06-06\"\n  question_submitted_on: \"2017-06-06\"\n  locators:\n    published_on: \"ESMA Q&A Excel export ESMA_QA_1826, column 'Esma responses', date line\"\n    question_submitted_on: \"ESMA Q&A Excel export ESMA_QA_1826, column 'Date of submission'\"\nlifecycle_label: \"Answer Published\"\n---\n\n**Answer by ESMA, published in its Q&A tool · not legislation · published 6 Jun 2017 [Answer Published]**\n\n*Answer Published · ESMA Q&A register, 6 June 2017 · Checked against the ESMA publication on 26 Oct 2026 · [Official source](https://www.esma.europa.eu/publications-data/questions-answers/1826)*\n\n| | |\n|---|---|\n| **Full title** | ESMA Q&A 1826 — Q&A — Information on cost and charges \\[Answer Published\\] |\n| **Prepared by** | ESMA |\n| **Published by** | ESMA, in the ESMA Q&A tool |\n| **Reference** | ESMA_QA_1826 |\n| **Document type** | Q&A |\n| **Legal nature** | Not legislation |\n| **Addressees** | Not stated in the document |\n| **Dates** | Published 6 June 2017; question submitted 6 June 2017 |\n| **Legal basis** | MiFID II |\n| **Related instruments** | None recorded |\n| **Text on this page** | Word for word — the full text of the ESMA publication |\n\n**Information on cost and charges**\n\n### Question\n\nHow should investment firms provide ex-ante disclosure of information on costs and charges to clients when there is no available data on actually incurred costs?\n\n***\n\n### Answer\n\n\\[ESMA 35-43-349 MiFID II Q&As on Investor protection Ch. 9, question 14\\]\n\nBased on article 50(8) of the MiFID II Delegated Regulation, when calculating costs and charges on an ex-ante basis, an investment firm shall use actually incurred costs as a proxy for the expected costs and charges. There may be circumstances where such data is not (entirely) available, for instance during the first year after MiFID II has become effective, when an investment firm just started business or in the case of new clients. In these cases, the investment firm should make reasonable estimations of the expected costs and charges.\n\nESMA considers an estimation to be reasonable when it includes all variables that directly impact the costs and charges that are expected to be incurred by the client, using actual data to the extent available and making reasonable assumptions otherwise. Examples of such variables are in the case of executing a transaction:\n\nthe type of financial instrument the client wants to buy or sell;\n\nthe cost of the financial instrument, if any;\n\nthe transaction size;\n\nthe commission that will be paid to the broker for executing the order;\n\nstamp duty paid by the client\n\nWhen the investment service provided to the client will involve an ongoing relationship, the ex- ante cost estimation would need to cover a certain period. In this case the investment firm would be required to apply an additional set of forward looking assumptions on the client’s investment portfolio and the expected investment service(s). Examples are:\n\nthe duration of the client relationship or period covered by the ex-ante cost estimation;\n\nthe average invested amount;\n\nfinancial instruments that will be included in the portfolio;\n\ncharacteristics of transactions that will be performed by or on behalf of the client.\n\nIn line with recital 78 of the MiFID II Delegated Regulation, investment firms should disclose the costs associated with the products and the service the client intends to subscribe to. In the case of potential clients, adapting the information may only be possible when the potential client has engaged with the investment firm. Until then, investment firms could disclose generic ex-ante information on costs and charges using other means, such as disclosing costs and charges for several examples of investor types, providing online access to interactive cost calculation tools or providing cost tables that include multiple investment scenarios.\n\nIn any case, the firm should provide the ex-ante information in good time and clearly disclose the underlying assumptions as well as the fact that its presented cost figures were calculated on a best effort basis due to the fact that historical data were not available, where relevant.\n\n***\n\n**Source:** [ESMA original document](https://www.esma.europa.eu/publications-data/questions-answers/1826)\n"}