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Sign in Mifid II product governance rules ‘will hit boutiques hardest’ 

April 27, 2016

Selin Bucak, Wealth Manager

Vertically integrated companies may come out on top following the implementation of Mifid II’s product governance rules.

‘You are going to need information from distributors,’ said Mark Forman, retail and distribution practice leader at sector consultancy Knadel. ‘It is obviously much easier in a vertically integrated company, where you control everything all the way through.’

Earlier this month, the European Commission published the Mifid II Delegated Acts Directive, clarifying the rules on product governance and in particular how these will affect the relationship between fund managers, as product manufacturers, and their distributors.

The directive requires fund suppliers to have greater oversight across the distribution chain to ensure products are being sold appropriately to their target markets.

This increased responsibility is likely to make compliance much more onerous for fund managers – especially boutique firms – as it requires systems that provide up-to-date information exchange between the distributor and the fund manager. Read more

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