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01/09/2017

ESMA issues guidelines on target market assessment under MiFID II

On 2 June 2017, the European Securities and Markets Authority (“ESMA”) issued its final Guidelines on product governance requirements as required under the MiFID II regime.

On 2 June 2017, the European Securities and Markets Authority (“ESMA”) issued its final Guidelines on product governance requirements as required under the MiFID II regime. The Guidelines follow a consultation undertaken by ESMA in Q4 2016 and focus on the “target market assessment" for both manufacturers and distributors. Before including a product into the distributor’s product assortment and selling it to clients, both sides will have to assess – for each single product - its target market, as well as its distribution strategy. They apply from 3 January 2018 to firms, including UCITS management companies and  AIFMs, carrying on individual portfolio management. Among the case studies in Annex V is one on the target market assessment for a non-complex UCITS.