MiFID II/PRIIPs: Investor Protection, Product Governance
and Promotion of Investment Products
This is a 15-hour Seminar aimed at providing 15 CPD units to professionals in the Financial Services Sector via offering a bouquet of expert and relevant titles in an easy to follow and comprehensive manner.
This course covers the issues of the Commercial Practices in the financial services sector and the approach in being compliant for this matter.
The new regulatory framework on the provision of investment services (MiFID II) and the packaged retail and insurance-based investment products (PRIIPs) is quite demanding on the issue of investor protection. In fact, the enhancement of investor protection is one of the cornerstones of both these legal acts. Taking into account that retail investors are increasingly offered a wide variety of investment services as well as of packaged retail and insurance-based investment products, the need to inform them adequately in order for them to be able to take informed decisions is very important.
Furthermore, Member States must ensure that the investment firms which manufacture financial instruments ensure that those products are manufactured to meet the needs of an identified target market of end clients within the relevant category of clients, take reasonable steps to ensure that the financial instruments are distributed to the identified target market and periodically review the identification of the target market of and the performance of the products they offer. Investment firms that offer or recommend to clients financial instruments not manufactured by them should also have appropriate arrangements in place to obtain and understand the relevant information concerning the product approval process, including the identified target market and the characteristics of the product they offer or recommend.
At the same time, according to the Commission, existing disclosures to retail investors for PRIIPs are uncoordinated and often do not help retail investors to compare different products, or understand their features. Consequently, retail investors have often made investments without understanding the associated risks and costs and have, on occasion, suffered unforeseen losses. Improving the transparency of PRIIPs offered to retail investors is an important investor protection measure and a precondition for rebuilding the confidence of retail investors in the financial market, in particular in the aftermath of the financial crisis.
Depending on the category of the investor (retail, professional, eligible counterparty) and on the category of financial instrument (complex or non-complex), the relevant capital markets law differentiates in a substantive way.
The new rules of MiFID II and PRIIPs as well as of the relevant delegated acts came in force on 3 January 2018.
