meta_id 3203601

On February 20, 2026, the European Commission adopted Commission Delegated Directive (EU) 2026/374, amending Delegated Directive (EU) 2017/593 regarding conditions for providing third-party execution and research services to investment firms offering portfolio management and other investment or ancillary services. The amendment reflects changes introduced by Directive (EU) 2024/2811, which amended Directive 2014/65/EU (Markets in Financial Instruments Directive) to enhance the attractiveness of public capital markets in the European Union and facilitate access to capital for small and medium-sized enterprises. The directive now permits investment firms to choose between paying separately or jointly for execution and research services, reducing administrative burden for firms that previously discontinued research services due to payment complexity. The amendment introduces robust quality assessment requirements applicable regardless of payment method. Investment firms must conduct annual assessments of research they consume or provide, based on quality criteria enabling objective evaluation of research quality, usability, value, and contribution to better investment decisions. Where assessments reveal insufficient quality or usability, firms must implement remedial actions, including requesting providers enhance quality, discontinuing use of inadequate research, or selecting alternative providers. The directive establishes requirements for firms operating separate research payment accounts, including funding through specific research charges, regular budget assessment, client information disclosure, and management controls with senior oversight. Research budgets must be based on reasonable assessment of third-party research needs and cannot fund internal research. Firms may delegate research account administration to third parties while remaining solely responsible for budget management. Member States must adopt and publish implementing laws, regulations, and administrative provisions by June 5, 2026, applying them from June 6, 2026. The European Securities and Markets Authority (ESMA) provided technical advice on the directive's provisions. The directive entered into force on the twentieth day following publication in the Official Journal of the European Union.