On 27 March 2023, the European Securities and Markets Authority (ESMA) published a Final Report: Guidelines on MiFID II product governance requirements.

The guidelines that have now been published build on ESMA’s guidelines on certain aspects of the MiFID II product governance requirements which were published in June 2017.  While the 2017 guidelines remain relevant, several regulatory developments including the European Commission’s Capital Markets Recovery Package prompted their review. ESMA conducted a public consultation on the 2017 guidelines to gather the views of relevant stakeholders. The Final Report, published today, contains a feedback statement summarising the responses received and explains how they have been taken into account.

Following the consultation, the main amendments introduced to the guidelines now published are as follows:

• The specification of any sustainability-related objectives a product is compatible with.
• The practice of identifying a target market per cluster of products instead of per individual product (“cluster approach”).
• The determination of a compatible distribution strategy where a distributor considers that a more complex product can be distributed under non-advised sales.
• The periodic review of products, including the application of the proportionality principle.

The guidelines will be translated into the official languages of the EU and published on ESMA’s website. The publication will trigger a two-month period during which Member State competent authorities must notify ESMA whether they intend to comply with the guidelines. The guidelines will apply two months after the date of the publication on the ESMA’s website in all EU official languages.