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Can the CTI Main Account template be used to report ex-post MiFID II costs?

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What is MiFID II?

Since the introduction of MiFID II on the 3rd January 2018, with the aim to increase market transparency in Europe and improve protection for investors, it has enforced regulations in which firms must disclose all the costs and charges for their investment services and activities to their respective investors.

The MiFID II Cost and Charges disclosure can be split into two key areas of costs: ex-post and ex-ante. Ex-post refers to reporting the costs incurred in past years (‘after the fact’) and ex-ante refers to reporting estimated costs for the next year to prospective investors, to aid them with making future investment decisions (‘before the event’).

The five cost categories that are required to be disclosed under MiFID II are:

For a glossary of the all the cost items reported in the CTI Main Account click here.

CTI Main Account and MiFID II

While the CTI Main Account template doesn’t disclose a line item for an aggregated ex-post MiFID II cost, all of the costs it is comprised of are included, hence can be used to report your ex-post MiFID II cost.

We calculate MiFID II by summing the following cells from the CTI Main Account template:

MiFID II = D28 + D56 + D61 + D67 + D69 + D84

Lending & Borrowing Cost (D67) and Property Expenses (D69) are also included.

To view the CTI Main Account template, click here.

Different mandates – how do the costs differ?

CTI User Summary and MiFID II

ClearGlass generates the User Summary, mapped from the data populated onto the CTI Main Account template, for all Pension Schemes and Consultants. This can be accessed by logging onto our platform. Here, an aggregated MiFID II cost is clearly stated as both a monetary value and percentage of the average net asset value (NAV) – compliant with the MiFID regulation of reporting the cumulative impacts of costs on returns.

Overall, the CTI Main Account template reports costs and charges – inclusive of those part of ex-post MiFID II. However, no ex-ante costs and charges are reported in the CTI. In contrast, the European MiFID Template (EMT) reports both ex-ante and ex-post costs.

Our next blog post will introduce the EMT and DC Workplace Pension Template (DCPT), further explain ex-ante costs, as well as highlight the benefits and limitations of each template through a side by side comparison.