Understand MiFID II Product Governance & Investors Information in 2026
MiFID II (Markets in Financial Instruments Directive II) is an EU regulatory framework that took effect on 3 January 2018. Building on the original MiFID regime introduced in 2007, it was developed following the 2008 financial crisis to reinforce the integrity of financial markets, strengthen investor protection, and increase transparency across the European Union’s financial sector.
In this commentary, the SALVUS Regulatory Compliance Team examines the following key aspects of MiFID II Product Governance and Investor Information:
1. What is Investor Information Under MIFID II
2. What is Product Governance Monitoring?
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1. Investor Information Under MiFID II
Under MiFID II, Investor Information encompasses the requirements designed to ensure that clients receive clear, complete and timely information about financial instruments, investment services and the risks involved. These obligations aim to strengthen investor protection and promote greater transparency across EU financial markets.
Key elements of Investor Information include:
- Client Classification – categorizing clients as Retail Clients, Professional Clients or Eligible Counterparties.
- Disclosure of Costs and Charges – providing relevant ex-ante and ex-post information on applicable fees and charges.
- Suitability and Appropriateness Tests – evaluating whether products and services are suitable or appropriate for the client.
- Information on Products and Services – ensuring clients understand the characteristics, risks and key features of the products and services offered.
MiFID II also requires investment firms to communicate with clients in a fair, clear and transparent manner, taking into account their level of knowledge, experience and regulatory classification. Firms must provide sufficient information on products, risks, costs and potential conflicts of interest before services are provided.
Where investment advice is offered, firms must assess whether the proposed product or service is consistent with the client’s financial situation, investment objectives and risk profile. They must also disclose whether the advice is provided on an independent basis and explain any relevant fees, commissions or other inducements, enabling clients to make more informed investment decisions.
2. Product Governance Monitoring
Under MiFID II, product governance is an ongoing process aimed at ensuring that investment products continue to meet the needs, characteristics and objectives of their intended target market. Rather than being a one-off exercise, it requires firms to monitor products throughout their lifecycle and reassess them where necessary.
The Compliance function plays an important role in supporting this framework by providing regular information to senior management on the products offered, their distribution and the related investment services. This helps management maintain effective oversight and remain informed of any issues that may require action.
Ongoing monitoring should also assess whether products remain appropriate for the identified target market. Firms may consider factors such as client feedback, sales patterns and product performance, and make adjustments where the original product strategy is no longer suitable.
Effective product governance also depends on cooperation between product manufacturers and distributors. Manufacturers are expected to define the target market and communicate relevant product information, while distributors provide feedback on how products are being distributed and received by clients.
By treating product governance as a continuous responsibility, firms can strengthen investor protection, improve oversight and support continued compliance with MiFID II requirements.
Final Thoughts
In conclusion, MiFID II product governance aims to ensure that financial instruments are designed, distributed and reviewed in a way that remains consistent with the needs and characteristics of the intended target market. This requires ongoing cooperation between manufacturers and distributors, supported by effective compliance oversight and active management involvement. At the same time, investor information requirements help ensure that clients receive clear, complete and timely information about financial products, associated risks and investment services. Through transparent communication, appropriate client classification and suitability or appropriateness assessments, firms can support both regulatory compliance and informed client decision-making.
To support professionals in meeting these requirements, SALVUS Funds, in collaboration with the Institute for Professional Excellence (IforPE), offers the self-paced course “Understand MiFID II Product Governance & Investors Information in 2026”. The course provides an overview of investor information obligations, marketing-related requirements and the Product Governance framework established under the Markets in Financial Instruments Directive (MiFID II).
The SALVUS Regulatory Compliance Team can support CIF regulated entities obliged under the MiFID regulatory framework, to fulfill 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 2026” 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.