In institutional fund management business, fund managers often receive their management fees directly from the investors in the fund (e.g. Swiss pension funds) rather than from the fund itself. Previously, the payment of these fees triggered Swiss VAT (currently 7.7%), albeit incorrectly.
Under MiFID II, financial institutions providing both execution and research services must price and supply them separately (i.e. unbundled). As the separately supplied research service is subject to 7.7% VAT, the new rule will impact Swiss businesses providing or receiving research services.