11 October 2022

BEUC: ESMA guidelines on MiFID II product governance requirements

BEUC largely agrees with ESMA’s proposals for changes to the product governance guidelines. While we are suggesting improvements in a few sections, the changes overall contribute to a more consumer friendly interpretation of the MiFID II framework.

However, we would like to stress that the MiFID II framework is often not suitable to produce adequate results for consumers in many cases. We therefore also highlight where the framework is unsuitable to accomplish this goal, so that these points may be taken into account in future reviews.

Complex financial products present several challenges from a consumer perspective. These products are not just very difficult for consumers to understand but they are also often inflexible. When too many financial objectives, such as savings but also insurance, are tied up in a single product it becomes very difficult to adjust to new situations in life, such as terminating the insurance without harming the investment. Complex financial products are also frequently very expensive, which means they are of lower quality as investment products. BEUC therefore welcomes that complex products are subjected to higher levels of scrutiny.

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