The European Securities and Markets Authority (ESMA) has updated its guidelines on MiFID II product governance requirements. The guidelines are intended to achieve better investor protection and more convergence in the interpretation and supervision of the MiFID II requirements as regards product governance, namely, by requiring the manufacturers and distributors to identify the potential target markets for their products.
The guidelines clarify the various elements that both manufacturers and distributors must take into consideration to determine whether the products they sell and the market strategies the employ are in line with the objectives and needs of their clients, depending on the types of products concerned. They take into account the latest regulatory developments, in particular as regards sustainable finance, and the increasing digitalization of marketing and distribution practices.
The FSMA considers that these guidelines make it possible to provide useful clarifications on the implementation of certain legal and regulatory provisions, and will therefore include it among its supervisory instruments and in its practice.
The ESMA Guidelines are available here.