A Practical Insight to MiFID II’s Product Governance Regime

The Product Governance Regime went live for firms with the introduction, on the 3^rd of January 2018, of the Markets in Financial Instruments Directive Recast (MiFID II).  The regime is designed to ensure that when a firm manufactures or distributes regulated financial services and products, it has arrangements in place to understand the products and ensure they are only sold to investors and clients for which they are likely to be deemed suitable. The new requirements will apply to “services” as well as “products”, for all client types and to all distributors in the sales chain.

The product governance requirements ensure that firms, which manufacture and distribute financial instruments and products, act in the clients’ best interests during all stages of the life-cycle.  This workshop examines the organisational arrangements that firms will need to consider.

Training Objectives

By the end of the programme, participants will be able to:

• Assess the key regulatory principles that firms should review in relation to the product governance framework including governance, management oversight, roles & responsibilities and process
• State the practical considerations for investor protection including target market, fair value, customer needs, terms and processes
• Examine the requirement to review products regularly to assess whether the product remains consistent with the needs of the target market of the product
• State the product approval obligation on firms acting as manufacturers, distributors and intermediaries
• Examine a model framework which promotes an appropriate approach to addressing conduct risk
• Summarise the impact for distributors in relation to suitability and appropriateness, information to clients, independent advice, inducements and remuneration
• Describe the implication for relationships with third-country manufacturers and distributors, ensuring the level or product information meets the regulatory standard
• State implementation considerations for firms under the regime including governance and management oversight, roles and responsibilities, and monitoring
• Describe the National Competent Authorities (NCA’s) product intervention powers and consideration for complex and non-complex products
• Examine lessons learnt from the EU implementation of its guidance in its Responsibilities of Providers and Distributors

Training Outline

The Overarching Product Governance Principles

This session looks at the overarching principles and requirements of the Product Governance regime to act in a client’s best interests, including funds and related management services, to end clients.

A High–Level Review of the Requirements

The product governance regime places responsibilities on manufacturers’, distributors and intermediaries of financial products and services. There are detailed requirements in relation to target market specifications, management oversight and distributors obligations.

A manufacture is a firm which creates, issues and/or designs investments, including when advising corporate issuers on the launch of new investments. This session examines the regulatory and operational impact for market participants.

Overarching Firm Responsibilities

The product governance requirements state that systems and controls to be put in place to design, approve, market and manage products throughout the product’s lifecycle to ensure that they meet legal and regulatory requirements.  This session examines some of the challenges firms will face while implementing this new regime.

Training Style

This workshop is designed to be participative throughout. The agenda will combine key formal presentations, case studies and syndicate discussion sessions. There will be ample opportunity for delegates to benchmark experiences with industry peers and raise issues of most concern to their organisation, either confidentially or in open session.

Who Should Attend

Management, compliance and administration professionals whose companies are regulated by CySEC, particularly senior management, legal, compliance, internal audit and those front-line employees.