MiFID II Product Governance - Including ESG

Why focus on MiFID II Product Governance?

• Why does this matter
• What are the regulations designed to achieve?
• ESMA, FCA & Other Regulatory Directives
• The latest news
• MiFiD II requirements in PROD

MiFiD II – Manufacturers

• The product life cycle and manufacturers’ responsibilities, and consideration of good practice:
• Idea Generation– including a deep dive into the construction of a Target Market and ESMA (The European Securities and Markets Authority) [1] examples
• Design– encompassing Investment Proposition, Costs & Charges, Risk, Stress Testing, Operations, Compliance, Legal & Tax
• Distribution Strategy– what to consider, including an exercise on the risks of different methods of distribution and inducements
• Product Approval & Launch– responsibilities of senior management and the Product Governance Committee
• Marketing & Distribution– relationships with and information provided to distributors
• On-going Product Maintenance– post launch review, compliance monitoring, significant adaptations, crucial events and management information
• Maturity & Withdrawal– Focus on Treating Customers Fairly

MiFiD II Case Study 1 – New Product Launch   

MiFiD II – Distributors

• The pre and post-sale responsibilities of distributors, including consideration of good practice 
  • Obtaining sufficient information– from manufacturers inside and outside of the EEA
  • Distribution strategy– Target Market Assessment, what happens if the distributor doesn’t agree with the manufacturer?
  • Post-sale reviews– what to consider, who should conduct the review and who should read and act upon the results
  • Reporting– information to manufacturers and distribution chains
  • Management Information– what should be included and who should receive and who should act on it?

MiFiD II Case Study 2 – MiFiD II Portfolio Management   

Product Governance Framework

• What elements should be included in your product governance framework?
• Structure of the Product Governance Committee – responsibilities, who should attend, their knowledge and experience, key areas of focus, the information it should receive, reporting and escalation
• Product Gobernance “best practice” check list
• How should this work in practice
• Impact on Manufacturers, Distributors or both

ESG

• What is ESG
• What impact does it have on product governance
• The general rules
• ESG Amendments – mandatory from November 2022
• ESMA Final Report Guidelines
• ESG template
• Dealing with ESG in practice

The trainer had a highly successful, long and varied “fast track” career in Lloyds Bank which led him to a very senior management position in the bank’s private banking and wealth management division at an early age. He was then “head hunted” to join a merchant bank to head the risk function at the primary board director level risk function. He now has over 40 years of experience in the UK banking and financial services sector.

The trainer has been a freelance Compliance, FCC & AML training consultant since retiring and is currently an external Master Trainer at both HSBC and Bank of China. At HSBC, he has been a leading member of their global FCC & AML training programme, which is now entering its sixth year. He has created and delivered training to a vast range of clients, from global giants to small firms and partnerships. He is an accomplished global trainer and has delivered extensive programmes in the UK, USA, South America, Europe, Africa, Asia and the Middle East.

He is a highly adaptive, hands-on and highly sought-after facilitator who always receives excellent feedback from delegates. He is comfortable training at any level of seniority and experience, from “black belts” to novices. As well as his Compliance, FCC & AML specialism, his expertise includes but is not limited to Risk Management, Trade Finance and all major aspects of Corporate, Private & Retail Banking. He is also a highly experienced soft skills trainer and has completed numerous “train the trainer” assignments.

• Learn more about why MiFID II Product Governance is such an area of focus
• Be taken through a summary of the FCAs PROD Sourcebook and how it applies to the product life cycle
• Understand the different responsibilities of manufacturers and distributors, and how they should interact
• Think about how other areas of MiFID II (Markets in Financial Instruments Directive) relate to the FCA Product Governance process
• Discuss what their Product Governance framework should now look like
• Think about how their Product Governance Committee is structured, what it should focus on, the information it receives and who its participants should be
• Participate in Case Studies to cement understanding

• Your course director has worked in-house and as a consultant within various Product Governance Committees and has first-hand experience of dealing with the launch of new products and services
• The latest EU & FCA (Financial Conduct Authority) level updates on the practical implementation of manufacturer and distributor reporting requirements are discussed
• The MiFID ii product governance training course is presented using the Product Life-Cycle to describe the MIFID II product governance requirements, which places them into context and makes them easy to understand
• Bringing your own questions and discussion during the MiFID product governance course is actively encouraged

This MiFID ii product governance training course is a 'must know' for:

• Senior managers seeking to gain a better understanding of their responsibilities in this area
• Compliance & Risk Officers
• Product Managers
• Anyone who participates in a Product Governance Committee (Investment Professionals, Distribution & Marketing, Operations, Finance, Legal or Tax)

The FCA has long been focused on Product Governance, and published its guidance on “The Responsibilities of Providers and Distributors for the Fair Treatment of Customers” (RPPD) back in 2007.

Since 2007 there have been many high-profile failures – Payment Protection Insurance (PPI), LIBOR and Interest Rate Hedging to name a few.  Alongside other market developments, these failures led to the inclusion of formal MiFiD II Product Governance rules, which the FCA has translated into its new PROD Sourcebook.

The MiFID II Product Governance requirements go further than the RPPD, introducing new concepts, such as MiFiD II Target Market, which affect every part of the product life cycle.  The FCA expects firms to rigorously implement PROD and ensure that customers’ interests are put before all else in the manufacture and distribution of products and services.

In this MiFID ii product governance course, we will identify the changes firms need to make to their existing Product Governance frameworks, including where other aspects of MiFID II should be considered.  We will also discuss what your Product Governance Committee should focus on, and the roles and responsibilities of the various participants in the process.