Way back in October 2011, the European Commission formally adopted a provision for MiFID I to be replaced by MiFID II. On the 3^rd January 2018, more than six years later, MiFID II will finally go live after an enormous effort by regulators, firms, third parties, and everyone connected to the design and implementation of the directive.

One of the many new requirements MiFID II introduces is a pan-EU regime for firms? product governance arrangements. The framework includes a number of responsibilities including management body controls, scenario analysis, and product sales. However, it's the requirement for manufacturers to develop a 'target market? for end clients that has caused the most debate in the industry.

UK Finance has developed guidelines on this target market criteria so firms can share data in the knowledge their activity will be broadly in line with a common industry approach, and aims to deliver a level of consistent application of the requirements, which would greatly benefit manufacturers, distributors, and the end clients. Our guidelines on the information exchange between manufacturers and distributors aim to further promote consistency, as well as supporting industry stakeholders in meeting their wider product governance requirements.

A natural consequence of the new MiFID II rules will be to create industry-wide renegotiations between manufacturers and distributors, as well as those firms which have a ?co-manufacturing? relationship. UK Finance has developed a standard set of responsibilities which firms may wish to use in what will be a colossal re-negotiation and re-papering exercise.

Another aspect of MiFID II which created significant challenges for the industry is the expansion of the costs and charges regime, particularly with regards to ex-ante disclosures, the illustration of the cumulative effect of costs on an investment, and the calculation of transaction costs. UK Finance has developed guidelines in a Q&A format to provide firms with some clarity as to how they may wish to tackle some of these difficult issues from a retail perspective.

While UK Finance naturally has full faith in the accuracy of our guidelines, we must point out the contents of the various guidelines represent the views of our members, and are strictly for guidance only. The documents have not been approved by a regulatory body, do not represent formal or legal regulatory advice, are non-binding, and absolutely do not give rise to enforceable obligations or duties.