The European Securities and Markets Authority (ESMA) on Wednesday launched a consultation on product governance guidelines.
The proposed guidelines seek to enhance investor protection by regulating “the life-cycle of products or services in order to ensure that firms which manufacture and distribute financial instruments and structured deposits act in the clients’ best interests,” ESMA says in a news release.
The requirements include product governance obligations for both product manufacturers and distributors. The requirements for distributors include measures for firms to adopt when deciding on the range of products and services that they intend to offer to clients, and when recommending products to clients.
Separately, ESMA issued a consultation paper that sets out draft requirements for the management of trading venues and data reporting providers, which aim to ensure the sound and prudent management of these firms.