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European Securities and Markets Authority Publishes Revised Guidelines on MiFID II Product Governance Requirements for Malta-Based Investment Firms

The European Securities and Markets Authority (ESMA) has published a final report outlining revised guidelines on product governance requirements under the Markets in Financial Instruments Directive II (MiFID II). The new guidelines aim to ensure that investment firms in Malta and across the EU manufacture and distribute financial products in the best interests of clients.

Key Changes

The revised guidelines take into account recent regulatory and supervisory developments, including amendments to the MiFID II Delegated Directive related to sustainability. The changes include:

• Specifying sustainability-related objectives for products
• Identifying target markets through clustering approaches
• Determining compatible distribution strategies
• Conducting periodic reviews of products

Full Text and Implementation Timeline

The full text of the revised guidelines can be found in Annex V of the final report, which outlines both general and service/client-specific guidelines for manufacturers and distributors. ESMA is currently translating the guidelines into EU official languages, with implementation expected two months after publication on its website.

Preparation and Next Steps

In preparation for the new guidelines, Malta-based investment firms are advised to review their existing product governance policies and processes in line with the final report. The revised guidelines aim to strengthen investor protection by ensuring that financial products are manufactured and distributed with clients’ best interests at heart.