MiFID II Product Governance

This course can be presented face to face in-house or via live in-house webinar.

A Half Day Training Course

MiFID II Product Governance Course Objectives:

Participants will:

  • Learn more about why Product Governance is such an area of focus
  • Be taken through a summary of the FCA’s 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 relate to Product Governance
  • 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

Who should attend this course?

  • 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)

MiFID II Product Governance Course Content:

Why focus on Product Governance?

  • Past experiences
  • The FCA’s implementation of the MiFID II Product Governance requirements in PROD
  • FCA’s Retail Banking: Product Governance Review (March 2018) – what we can learn?

The FCA’s PROD Sourcebook – Manufacturers

  • The product life cycle and manufacturers’ responsibilities, and consideration of good practice:
    • Idea Generation – including a deep dive on construction of a Target Market and ESMA[1] examples
    • Design – encompassing Investment Proposition, Costs & Charges, Risk, Stress Testing, Operations, Compliance, Legal & Tax
    • Distribution Strategy – what to take into account, 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

Case Study 1 – New Product Launch

The FCA’s PROD Sourcebook – 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 take action on the results
    • Reporting – information to manufacturers and distribution chains
    • Management Information – what should be included and who should receive and act on it

Case Study 2 – 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

Case Study 3 – Existing Product, Significant Adaptation

If you don’t have time to attend a half day course, why not participate in our MiFID II Product Governance – Essentials Course 

Background of the Trainer:

The trainer has over 15 years of experience working within the UK financial services industry as a Compliance Officer.  A specialist in providing technical advice, gap analysis and training for the implementation of new and amended UK and European regulation, she has helped firms to understand and apply the complex requirements of both the AIFMD and MiFID II. The trainer is particularly talented at making complex regulatory requirements simple to understand and applicable to all levels of an organization, from the person whose day to day role will be affected, to Compliance Teams and Senior Management who monitor and oversee the changes.

MiFID II Product Governance Course Summary:

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 a myriad of 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 Product Governance rules in MiFID II, which the FCA has translated into it’s new PROD Sourcebook.

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

In this 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.

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