On 1 February 2021, the European Securities and Markets Authority (ESMA) announced that it was launching a common supervisory action (CSA) with Member State national competent authorities (NCAs) on the application of MiFID II product governance rules across the EU. The CSA will be conducted this year. The purpose of the CSA will allow ESMA and the NCAs to assess the progress made by manufacturers and distributors of financial products in the application of the MiFID II requirements. In particular the CSA is designed to help with the analysis of:

• How manufacturers ensure that financial products’ costs and charges are compatible with the needs, objectives and characteristics of their target market and do not undermine the financial instrument’s return expectations.
• How manufacturers and distributors identify and periodically review the target market and distribution strategy of financial products.
• What information is exchanged between manufacturers and distributors and how frequently this is done.