On 5 October 2016, the European Securities and Markets Authority (ESMA) opened a consultation on product governance guidelines under the Markets in Financial Instruments Directive (MiFID II) regarding the target market assessment by manufacturers and distributors of financial products.

The requirements on product governance were introduced under MiFID II to enhance investor protection by regulating all stages of the life-cycle of products or services in order to ensure that firms which manufacture and distribute financial instruments and structured deposits act in the clients’ best interests. These requirements cover arrangements for:

1. firms to adopt when manufacturing products (product governance obligations for manufacturers); and
2. firms to adopt when deciding the range of products and services they intend to offer to clients and when offering or recommending such products to clients (product governance obligations for distributors). 

For more information on MiFID Firms click here.