Circulaire CSSF 23/840 Application des orientations de l’Autorité européenne des marchés financiers sur les exigences en matière de gouvernance des produits au titre de la directive MiFID II (uniquement en anglais)

Circular CSSF 23/840, issued by the CSSF, covers the application of the Guidelines set forth by ESMA concerning the product governance requirements introduced by MiFID II (ESMA35-43-3448). These guidelines, published on 3 August 2023, aim to ensure that financial products are created and distributed in the best interests of clients. The key updates to these guidelines encompass the inclusion of sustainability-related objectives, the practice of identifying target markets on a cluster basis rather than for individual products, the establishment of a compatible distribution strategy for more complex products under non-advised sales, and the periodic review of products, guided by the principle of proportionality.
The CSSF, as the competent authority, will implement and enforce these ESMA Guidelines from 3 October 2023 onward. These Guidelines are designed to promote supervisory convergence at the European level and in order to provide clarity on specific aspects of MiFID II product governance requirements, ensuring uniform application across Articles 9(3), 16(3), 16(6), 24(1), and 24(2) of MiFID II and Articles 9 and 10 of the MiFID II Delegated Directive.
The Guidelines apply to investment firms, credit institutions, UCITS management companies, and external AIFMs when they provide investment services, investment activities, and advice related to structured deposits. They also extend to UCITS management companies offering portfolio management services or investment advice, as well as external AIFMs providing portfolio management, investment advice, or order transmission services, all on a discretionary, client-by-client basis.
However, the Guidelines do not apply when financial instruments are exclusively marketed or distributed to eligible counterparties, as per the exemption in Article 16a of MiFID II.
As stated above, these Guidelines and the associated present Circular will become effective on 3 October 2023, at which point the previous ESMA guidelines on this subject will no longer be applicable.