The UK Finance has published the following set of guidelines designed to help firms implement some of the key requirements under MiFID II:
- MiFID II product governance: Guidelines on target market identification. These guidelines focus on the identification of the target market, and are intended for use by MiFID firms who are manufacturers or distributors of financial instruments, as well as those providing services to clients. The guidelines are designed to act as a tool so firms can clearly and efficiently define, review and share target market information in the knowledge that it will be broadly in line with a common industry approach;
- MiFID II product governance: Guidelines on information exchange between manufacturers and distributors. MiFID II sets out clear expectations for manufacturers to make available to distributors appropriate information on the financial instruments and the product approval process, including the identified target market of the instrument. It also requires distributing firms to have in place adequate arrangements to obtain such information and to understand the characteristics and the target market for each financial instrument. To comply with these requirements firms will need to have a reasonable expectation that the information received by the other party will provide sufficient content for that party to comply with its own obligations. Therefore, the guidelines are designed to facilitate the information-exchange process by outlining the information that could be exchanged between the parties, and the potential process for the information flow;
- MiFID II product governance: Standard responsibilities annex. MiFID II requires firms, when they collaborate in the manufacture of a product, to outline their mutual responsibilities in a written agreement. To comply with this requirement, it is expected that firms will need to update their existing arrangements, or provide for appropriate documentation of previously undocumented relationships. To facilitate the repapering exercise, the guidelines set out standard wording for the allocation of responsibilities for both a co-manufacturing and a standard manufacturer/distributor scenario; and
- MiFID II retail costs and charges: Guideline Q&As. MiFID II requires firms to disclose appropriate information on all costs and related charges for both investment and ancillary services. These requirements significantly increase the granularity and complexity of the costs and charges framework. These guidelines are designed to help firms implement this framework, in relation to retail customers only. They provide details of the key relevant guidance.
The UK Finance notes that it intends to keep the guidelines under review and amend them where appropriately.
View UK Finance MiFID II product governance: Guidelines on target market identification, 14 December 2017
View UK Finance MiFID II product governance: Standard responsibilities annex, 14 December 2017
View UK Finance MiFID II retail costs and charges: Guidelines Q&A, 14 December 2017