Q&A · ESMA

Product governance

Answered

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AI-generated Summary

Manufacturers must design charging structures that the target market can understand: no artificially low introductory costs, unnecessarily complex fee formulas, excessive or split cost components or duplicated fees, and testing of disclosures where costs are particularly complex.

Details

Reference	ESMA_QA_1125
Issuer	ESMA
Published	6 Nov 2020
Answered	6 Nov 2020
Submitted	6 Nov 2020
ESMA topics	Product governance
Earlier Q&A document	ESMA35-43-439 Investor protection, Product governance Q&A 4

Provisions it relates to

Article 16 MiFID II · Organisational requirements
MiFID II
Inferred · 85%
MiFID II (whole act)
Explicit reference

Documents it refers to

Delegated actIn forceExplicit reference · 90%
Commission Delegated Directive (EU) 2017/593 of 7 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to safeguarding of financial instruments and funds belonging to clients, product governance obligations and the rules applicable to the provision or reception of fees, commissions or any monetary or non-monetary benefits
European Commission · 31 Mar 2017 · EUR-Lex
AI summaryThe MiFID II Delegated Directive on safeguarding client financial instruments and funds (deposits, use of client assets, title transfer collateral, a single officer responsible, auditor reports), product governance duties for manufacturers and distributors, and inducements, including rules for independent advice, portfolio management and research. Since amended, including by Delegated Directives 2021/1269 (sustainability) and 2026/374 (research payment).