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Purpose

The purpose of this paper is to summarize and discuss the implications of three related U.S. Securities and Exchange Commission (SEC) no-action letters dated October 26, 2017 that seek to address the provisions of MiFID II related to “inducements”.

Design/methodology/approach

Provides background information regarding MiFID II and summarizes each of the three SEC Staff no-action letters: the SIFMA letter, the ICI letter and the AMG letter.

Findings

The no-action letters provide market participants with increased clarity as to how certain aspects of their business activities, in particular the “bundling” or “unbundling” of payments for research and execution, can comply with potentially competing systems of regulations.

Originality/value

Practical guidance from experienced financial industry and investment management lawyers.

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