Product governance under MiFID II: ESMA’s final guidelines

Draft guidelines on MiFID II product governance requirements, published last October, were not without controversy. In its final report of 2 June 2017, the European Securities and Markets Authority modified the guidelines in some areas, such as portfolio diversification. Davinia Collins and Emma Radmore examine the issues the guidelines address, and their effect on firms that manufacture or distribute Investment Products.

Davinia Collins and Emma Radmore are members of the financial services regulation team at law firm Bond Dickinson. Contact them on davinia.collins@bonddickinson.com and emma.radmore@bonddickinson.com.

Directive 2014/65/EU on markets in financial instruments (MiFID II), which comes into force on 3 January 2018, places an obligation on investment firms to understand the characteristics of the financial instruments or structured products (Investment Products) it offers or recommends to clients as well as develop and review policies and procedures to identify the category of clients to whom product and services are to be provided [1].