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Deutsche Asset Management says to absorb research costs due to new rules

FRANKFURT (Reuters) - Deutsche Asset Management (DBKGn.DE) said on Wednesday that it will not charge its clients for costs incurred by having to pay for external research under new rules for investment funds.

The new regulation, dubbed MiFID II, taking effect next year, will force brokers in the European Union to charge clients separately for investment research, rather than bundling the cost in with trading services.

"Deutsche Asset Management will absorb the cost of external research for funds under the new MiFID II directive," Deutsche's asset management head Nicolas Moreau said in an internal memo seen by Reuters.

He added that the unit will continue to rely heavily on its own research and will negotiate prices with third-party research vendors to optimize costs.

The majority of asset managers have opted to absorb the cost of paying for outside research instead of passing it on to clients.

(Reporting by Arno Schuetze; Editing by Maria Sheahan)