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published 3 Oct 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":"2017-10-03","question_submitted_on":"2017-10-03","locators":{"published_on":"ESMA Q&A Excel export ESMA_QA_1827, column 'Esma responses', date line","question_submitted_on":"ESMA Q&A Excel export ESMA_QA_1827, column 'Date of submission'"}},"adoption":null}},"provenance":{"official_url":"https://www.esma.europa.eu/publications-data/questions-answers/1827","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-1827-information-on-cost-and-charges.md","body_sha256":"d3115e2e945a12bb039e25a362220509bdca2619bdf296a2a1584268ad20a95e"},"units":[],"markdown":"---\ntitle: \"ESMA Q&A 1827 — Q&A — Information on cost and charges [Answer Published]\"\nshortTitle: \"ESMA Q&A 1827 — Q&A — Information on cost and charges [Answer Published]\"\nanswer_id: ESMA_QA_1827\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: 3 October 2017\nsource_link: https://www.esma.europa.eu/publications-data/questions-answers/1827\nlifecycle: \"Answer Published\"\ntext_version: \"ESMA Q&A register, 3 October 2017\"\nsource_url: \"https://www.esma.europa.eu/publications-data/questions-answers/1827\"\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_1827: 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: \"2017-10-03\"\n  question_submitted_on: \"2017-10-03\"\n  locators:\n    published_on: \"ESMA Q&A Excel export ESMA_QA_1827, column 'Esma responses', date line\"\n    question_submitted_on: \"ESMA Q&A Excel export ESMA_QA_1827, column 'Date of submission'\"\nlifecycle_label: \"Answer Published\"\n---\n\n**Answer by ESMA, published in its Q&A tool · not legislation · published 3 Oct 2017 [Answer Published]**\n\n*Answer Published · ESMA Q&A register, 3 October 2017 · Checked against the ESMA publication on 26 Oct 2026 · [Official source](https://www.esma.europa.eu/publications-data/questions-answers/1827)*\n\n| | |\n|---|---|\n| **Full title** | ESMA Q&A 1827 — 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_1827 |\n| **Document type** | Q&A |\n| **Legal nature** | Not legislation |\n| **Addressees** | Not stated in the document |\n| **Dates** | Published 3 October 2017; question submitted 3 October 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\nWhich methodology should an investment firm use when calculating the ‘costs related to transactions initiated in the course of the provision of an investment service’ for its ex-ante cost disclosure?\n\n***\n\n### Answer\n\n\\[ESMA 35-43-349 MiFID II Q&As on Investor protection Ch. 9, question 15\\]\n\nBased on article 50(8) of the MiFID II Delegated Regulation, investment firms shall use actually incurred costs as a proxy when calculating expected costs and charges on an ex-ante basis. Firms should ensure themselves that the incurred costs are a representative proxy for future costs, taking into account any changes that are expected to have a material impact on the transaction related costs and charges, for instance changes in broker tariff structures or significant changes in market liquidity that will affect transaction costs on an ongoing basis.\n\nWhere data on actually incurred transaction costs are not available, the investment firm shall make reasonable estimations of these costs, provided that it identifies all expected transaction costs associated with the transaction, and that it clearly discloses to clients the basis on which transaction costs have been estimated. Firms may for instance use the method provided for in paragraphs 21 to 23 of the Annex VI of the PRIIPs RTS.\n\nIn accordance with Article 50(8) of the MiFID II Delegated Regulation, investment firms are also required to review ex-ante assumptions based on ex-post experience and make adjustment to these assumptions where necessary.\n\n***\n\n**Source:** [ESMA original document](https://www.esma.europa.eu/publications-data/questions-answers/1827)\n"}