MiFID2: EU Commission adopts Delegated Directive on safeguarding of funds, product governance and inducements

The EU Commission has adopted a draft Delegated Directive under MiFID2. The Delegated Directive specifies rules relating to:

• safeguarding clients' financial instruments and funds;
   
• product governance requirements for investment firms that manufacture or distribute financial instruments; and
   
• inducements.

The draft Delegated Directive also clarifies the application of these rules to management companies under UCITS and the Alternative Investment Fund Managers Directive (AIFMD). The delegated act is based on the technical advice provided to the Commission by the European Securities and Markets Authority (ESMA) on 19 December 2014.

The draft Directive will enter into force on the twentieth day after its publication in the Official Journal and will be transposed by Member States.