MIFID II: ESMA update its guidance on product governance
On March 27 , 2023, the ESMA, the EU’s Financial Markets Regulator and Supervisor has published its Final Report on Guidelines on MiFID II product governance guidelines.
The main amendments introduced to the guidelines concern:
the specification of any sustainability-related objectives a product is compatible with;
the practice of identifying a target market per cluster of products instead of per individual product (“clustering approach”);
the determination of a compatible distribution strategy where a distributor considers that a more complex product can be distributed under non-advised sales;
the periodic review of products, including the application of the proportionality principle.
The Guidelines will apply two months after the date of the publication on the European Securities and Markets Authority’s website in all EU official languages.