An investment advisory firm with $300,000,000 under management that is registered with the SEC as a federal covered adviser uses an unaffiliated broker-dealer to execute its customers' trades. In return for directing the trades to the broker-dealer, the broker-dealer provides the adviser with "free" research, but charges a higher commission rate than a discount broker.
Which statement is TRUE?

A. This is a prohibited and unethical practice.
B. The investment adviser is prohibited from paying commission rates to the executing broker-dealer that are higher than the commission rates charged by average of the 3 lowest-priced brokers used by the adviser.
C. The investment adviser is permitted to pay the higher commission rate as long as it is disclosed to customers that the value of research received is considered when choosing an executing broker.
D. The investment adviser is permitted to choose any broker-dealer to execute its customer transactions as long as the broker-dealer is completely independent of the investment adviser.