[ESMA35-43-3448 ] Guidelines on MiFID II product governance requirements

Following the publication of the “Final Report on Guidelines on MiFID II product governance requirements“, ESMA has published the final document in that regard.
The guidelines set out the MiFID II product governance requirements, specifying sustainability-related objectives, identifying a target market per cluster, determination of a compatible distribution strategy and a periodic review of products.
Indeed, under the MiFID II product governance requirements, firms that manufacture products for sale to clients or distribute products to clients are required to maintain, operate and review adequate product governance arrangements. This includes identifying a target market of end clients and periodically reviewing it for each product, as well as ensuring a distribution strategy that is consistent with the identified target market.
As noted in eventid=20391 that was generated upon publication of the Final Report, the guidelines aim to ensure that financial instruments and structured deposits (“products”) are only manufactured and/or distributed when it is in the best interest of clients.