Understand MiFID II Product Governance & Investors Information in 2025
MiFID II (Markets in Financial Instruments Directive II) is a comprehensive regulatory framework introduced by the European Union that came into effect on January 3, 2018. It builds upon the original MiFID (2007) and was developed in response to the 2008 financial crisis to strengthen financial market integrity, enhance investor protection, and improve transparency across EU financial markets.
Within this commentary, the SALVUS Regulatory Compliance Team analyses the following aspects of the MiFID II Product Governance & Investors Information:
1. What is Investor Information Under MIFID II
2. What is Product Governance under MiFID II
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1. Investor Information Under MiFID II
Under MiFID II, Investor Information refers to the set of rules and obligations that ensure clients receive clear, comprehensive, and timely information about financial products, services, and associated risks. These requirements are designed to enhance investor protection and promote transparency across EU financial markets.
Key components of Investor Information
- Client Classification – whether Retail, Professional, and Eligible Counterparties.
- Disclosure of Costs and Charges – information about ex-ante and ex-post disclosures
- Suitability and Appropriateness Tests
- Information on Products and Services
Under MiFID II, investment firms must communicate with clients in a way that’s transparent, fair, and tailored to their needs. Clients are categorized based on their experience and protection level, and firms must provide clear information about products, risks, costs, and any conflicts of interest. Before offering advice, firms assess whether a product suits the client’s financial situation and goals. They also disclose whether the advice is independent and if they receive commissions, helping clients make informed decisions with confidence.
2. Product Governance Monitoring
Under MiFID II, product governance is more than a regulatory requirement, it’s a continuous process that ensures investment products remain suitable and aligned with client needs. It’s not something firms do once and forget, it requires ongoing attention and review.
The Compliance team plays a key role in this process. They’re responsible for regularly reporting to management, providing updates on the products offered, how they’re being distributed, and the services tied to them. These reports help leadership stay informed and accountable.
Monitoring also means checking whether products are still appropriate for their target market. This involves reviewing client feedback, sales data, and performance trends, and adjusting when needed.
Good product governance also depends on clear communication between manufacturers and distributors. Manufacturers must define who the product is for and share that information, while distributors provide feedback on how the product is being received. This two-way exchange helps firms stay responsive and compliant.
By treating product governance as an ongoing responsibility, firms can better protect clients and maintain trust in the financial services they provide.
Final Thoughts
In conclusion, product governance under MiFID II is designed to ensure that financial instruments are developed, distributed and monitored in line with client needs and target- market expectations. It relies on active collaboration between manufacturers and distributors, supported by continuous compliance oversight and management engagement. Meanwhile, investor Information requirements ensure that clients receive comprehensive, clear and timely disclosures regarding products, risks and services enabling them to make informed decisions. Through transparent communication, proper client classification, and suitability or appropriateness assessments, firms uphold both regulatory standards and client trust.
In response to this demand, SALVUS Funds, in collaboration with the Institute for Professional Excellence (IforPE), offers a self-paced course titled “Understand MiFID II Product Governance & Investors Information in 2025”. This program outlines the necessary knowledge about the information provided to investors, marketing restrictions, as well as the Product Governance regulatory requirements in accordance with the European Directive on Markets in Financial Instruments (MiFID II).
The SALVUS Regulatory Compliance Team can support CIF regulated entities obliged under the MiFID regulatory framework, to fulfil their annual regulatory reporting obligations and prepare your Annual Compliance Report through our Compliance Consulting service.
Contact us at compliance@salvusfunds.com if you need assistance, or if you have questions about our “Understand MiFID II Product Governance & Investors Information in 2025” online CPD course with IforPE.
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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.