The Markets in Financial Instruments Directive II, which goes into effect Jan. 3, will require financial firms with business or clients in the European Economic Area countries to separate research and execution payments.
The $1.9 trillion money management firm said in a statement Friday it "will be absorbing the cost of external research for all MiFID II regulated clients. Research costs will be paid by the business and not by MiFID II client accounts."
The firm "already commits substantial resources to our internal research capabilities and we have not made any changes to our internal research teams as a result of this policy change. We also utilize external analyst research where we believe it can add value to client portfolios," said the statement.
Earlier this week, Vanguard Group said it would absorb the cost of research, paid out of management fees.