Key data
| Regulation | Delegated Directive (EU) 2026/374 of the Commission, of 20 February 2026 |
|---|---|
| Modified regulation | Delegated Directive (EU) 2017/593 |
| Publication | 2 June 2026 |
| Entry into force | 2 June 2026 |
| Affected parties | Investment firms providing portfolio management services or investment services in the EU |
| Category | European Regulation |
| Timeline alignment | Transposition aligned with Directive 2024/2811 |
Investment firms managing portfolios or providing investment services in the EU must review their contracts and internal processes. The Delegated Directive (EU) 2026/374, published on 2 June 2026, amends Delegated Directive (EU) 2017/593 and introduces direct changes in how third-party financial research services are paid, evaluated and communicated.
The change is significant: the previous regulation created rigidity that discouraged the use of analysis on small and medium-sized enterprises. The new regulation removes that barrier and, at the same time, raises control and transparency requirements towards the end client.
What does this regulation establish?
Delegated Directive (EU) 2026/374 introduces three blocks of concrete changes compared to Delegated Directive (EU) 2017/593:
| Aspect | Before (Directive 2017/593) | Now (Directive 2026/374) |
|---|---|---|
| Payment model for research and execution | Rigid conditions that discouraged joint payment | Freedom to choose joint or separate payment of execution and research services |
| Assessment of research quality | No obligation for formalized periodic assessment | Mandatory annual assessment with robust criteria; corrective measures if quality is insufficient |
| Information to client | No specific obligation to inform about research budget | Obligation to inform about the budget allocated to research and total costs incurred |
| Coverage of analysis on SMEs | Discouraged by the rigidity of the previous model | Encouraged by removing barriers in the payment model |
The stated objective of the regulation is to protect the end investor by ensuring that the research used effectively contributes to better investment decisions. The transposition timelines are aligned with those established in Directive 2024/2811.
Economic and operational impact
The changes have direct consequences in three business areas:
- Management of research providers: The company can now negotiate and structure contracts with greater flexibility, choosing whether to pay jointly or separately for execution and research services. This can reduce costs or improve the quality of analysis received.
- Internal quality control processes: It will be necessary to design and implement an annual process for evaluating the research received. If the assessment detects insufficient quality, the company must take documented corrective measures. This involves human resources, time and possibly monitoring tools.
- Communication with clients: The company must inform its clients about the budget allocated to research and the total costs incurred. This affects periodic reports and already established reporting processes.
The impact on SME analysis is especially relevant: by removing the previous rigidity, investment firms can access and pay for analysis of smaller companies without the restrictions of the previous model, which expands the available investment universe.
Who does it affect?
- Investment firms providing portfolio management services in the EU.
- Investment firms providing other investment or ancillary services in the EU.
- Fund managers that contract financial research services from third parties.
- Compliance and internal control departments of financial entities subject to MiFID II.
- External providers of financial research services (indirect impact on their contracts and billing models).
Practical example
A fund manager based in Madrid contracts financial research services from an external provider and, at the same time, uses that same provider for order execution. Under Directive 2017/593, the joint payment model could generate compliance conflicts that discouraged this practice.
With the new Directive 2026/374, the fund manager can freely choose to pay both services jointly or separately, depending on what is most efficient. However, at the end of each fiscal year, it must conduct a formal assessment of the quality of research received with robust criteria. If the analysis received does not meet the standard, it must document and execute corrective measures (for example, changing providers or renegotiating service terms). Additionally, in the next report to its clients, it must detail how much it has budgeted for research and how much it has actually spent.
What should companies do now?
- Review current contracts with research and execution providers: Identify whether the current payment model is still the most appropriate or whether it should be restructured taking advantage of the new flexibility.
- Design the annual quality assessment process: Establish robust criteria for evaluating the research received, assign internal responsible parties and define what corrective measures will be activated if quality is insufficient.
- Update reports and communications to clients: Include in periodic reporting information about the budget allocated to research and total costs incurred, as required by the new regulation.
- Verify transposition timelines: The timelines are aligned with those of Directive 2024/2811. Confirm with the legal team the deadline for adaptation applicable in each Member State.
- Train compliance and portfolio management teams: Ensure that compliance officers and managers are aware of the new assessment and communication obligations.
Frequently asked questions
What exactly changes in the payment of financial research services with Directive 2026/374?
Delegated Directive (EU) 2026/374 amends Directive 2017/593 and allows investment firms to freely choose between paying jointly or separately for third-party execution and research services. Previously, the rigidity of the model discouraged joint payment and limited access to analysis on small and medium-sized enterprises.
How often must the quality of contracted financial research be assessed?
Assessment is mandatory on an annual basis. It must be carried out with robust criteria and, if the result detects insufficient quality, the company is obliged to take documented corrective measures.
What information must be provided to clients about research costs?
Companies must inform their clients about two concepts: the budget allocated to research and the total costs incurred for research services. This information must be included in periodic communications to the client.
When must this directive be transposed?
The transposition timelines of Delegated Directive (EU) 2026/374 are aligned with those established in Directive 2024/2811. The regulation was published and entered into force on 2 June 2026. To find out the exact transposition deadline in each Member State, it is necessary to consult Directive 2024/2811 and the national implementation schedule.
Does this regulation affect analysis on small and medium-sized enterprises?
Yes, in a positive way. The previous regulation discouraged the use of analysis on SMEs due to the rigidity of the payment model. Directive 2026/374 removes that barrier, encouraging investment firms to contract and pay for research on smaller companies without additional restrictions.
Official source
Consult full regulation at official source
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202600374