MiFID II: Further Guidance On Product Governance Requirements

Amongst the numerous topics covered by the Markets in Financial Instruments Directive II (MiFID II), the European Securities and Markets Authority (ESMA) has decided to provide further guidance on the requirements regarding product governance through its guidelines dated 2 June 2017 which focus on the target market assessment by manufacturers and distributors of financial products.

The main principles provided in these guidelines remain the same as in the consultation paper issued on 5 October 2016, although ESMA has modified the guidelines in some areas such as the number of categories to assess the target market, the requirements which should apply to simpler, more common investment products, as well as portfolio diversification.

Practical examples of target market assessment are also provided by ESMA, including for non-complex UCITS, which should make certain aspects of these guidelines easier to apply.

Arendt has built a significant expertise in assisting clients in the conduct of impact assessments, the...