MiFID II Product Governance and Development
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Product governance is probably the most important new subject area for financial services professionals in the EU. It finally entered the regulatory vocabulary at European level with the implementation of MiFID 2, closely followed by that of the Insurance Distribution Directive’s own provisions on the subject. ESMA has already intervened in the marketing and promotion to retail customers of binary options and contracts for differences and Cyprus has responded to the ending of the ESMA measures by implementing its own intervention in September 2019.
The subject has two sides to it. First, there is the process of carrying out product governance, the structures that businesses need to have in place to meet the regulators’ objectives. Then, there are the various tasks that manufacturers and distributors must undertake when launching products and on an ongoing basis.
In a turbulent compliance environment, regulators around the world are increasingly turning towards product governance, its processes and activities as a key to avoiding future miss-selling scandals. Yet, problems in this area keep emerging as businesses try to promote products using inappropriate distribution or without properly defined target markets or business controls.
Product governance could well be the big subject of 21st century compliance. Where once financial services regulators focused almost exclusively on sales practices, the spotlight is now firmly on the way firms develop their products and decide how to distribute them. Since MiFID 2 introduced the subject at EU level, product governance by both manufacturers and distributors has become central to European regulation. On top of that, the European Securities and Markets Authority and now national regulators like CYSEC have intervened to restrict sales to retail customers in response to perceived governance failures. Our trainer, Adam Samuel, is a compliance consultant based in the UK and brings to our discussions experience going back to the start of the millennium.
By the end of the programme, participants will be able to:
Understand the key MiFID and MiFID-related provisions on product governance
Appreciate the goals of product governance and the risks of not achieving them
Identify strengths and weaknesses in product governance structures
Identify the positive and negative target markets of investment products and services
Piece together the key elements in designing a product or service
Determine the types of distribution that would not be suitable for certain types of products
Gather key management information about the success or otherwise of the governance process
What is product governance?
Where do you find out about it?
Defining manufacturer and distributor
The arrangements, structures and processes required
Who should do what, when and how?
The role of compliance and the company’s governing body
Product risk management – including joint manufacturing, staff competence and managing conflicts of interest
Reviews of the process – ongoing and regular product reviews
Identifying target market for the product or service
Creating the product and modelling it
Selecting distributors & monitoring them
Producing marketing materials
Distributors’ specific tasks – know your product, co-operate with product reviews, reliance on provider material
The training style is interactive involving a combination of discussions and presentation, group work and case studies (taken from real-live examples). Participants are encouraged to share their opinions from their different perspectives.
This programme may be approved for up to 5 CPD units in Financial Regulation. Eligibility criteria and CPD Units are verified directly by your association, regulator or other bodies which you hold membership.
Professionals requiring CPD units to meet the education requirements for CySEC licence renewal, and/or for maintaining other professional memberships/certifications which accept CPD in Financial Regulation, are advised to consider training subjects in categories that indicate
CPD training in Financial Regulation.
Who should attend
The programme is ideal for:
Board directors and chief executives
Compliance officers and managers
Product governance staff