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5 CPD

Course Description

This course describes the concept of product Manufacturer and product Distributor and explains the main objective of product governance requirements as well as the main principles of Product Governance. It analyses in detail the steps that Investment firms should follow to implement the product approval process (PAP).

The objective of the product governance requirements is to ensure that firms, which manufacture and distribute financial instruments and structured deposits, act in the clients’ best interests during all the stages of the life-cycle of products or services. In order to avoid and reduce from an early-stage potential risks of failure to comply with investor protection rules, investment firms manufacturing and distributing financial instruments should comply with product governance requirements.

Firms must maintain, operate and review a process for the approval of each financial instrument and significant adaptations of existing financial instruments before it is marketed or distributed to clients.

Product Manufacturers are investment firms that create, develop, issue and/or design financial instruments, including when advising corporate issuers on the launch of new financial instruments. Product distributors are investment firms that offer or recommend or sell financial instrument and services to clients.

A Product Approval & Review Process (PARP) consists of a: (a) Product Approval Process (PAP) and (b) Product Review Process (PRP). The objective of the PAP is to ensure that in the development of a new product (including services), the interests of customers are taken into account in a balanced way. The product should be the result of this balancing of interests.

Specific product governance requirements apply to organisations subject to MiFID II. The most important additional MiFID II requirements concern: (a) The requirement for determining the target market in more detail; (b) MiFID II explicitly distinguishes between organisations that develop (manufacture) products and those that only distribute products. Distributors are expected to identify their target market more precisely; (c) MiFID II imposes additional information requirements for the periodic product review. For example, distributors are required to provide the developer (manufacturer) with relevant information; (d) The compliance function has a specifically defined role in product development and distribution; (e) MiFID II requires the description and mitigation of potential conflicts of interest in the context of product development or distribution.

The compliance function has the specific roles in the PAP/PRP, like for example (a) establishing that the PAP/PRP policy meets the legal requirements; (b) monitoring that product approval and evaluation is carried out conform with policy and process; (c) reporting on the product approval and distribution strategy for these products.

Topics covered

The course is split into the following sections:

Section 1: Introduction

  • Product Manufacturers
  • Product distributors
  • A Market Maker Broker is considered as a manufacturer or Distributor?
  • An STP Broker is considered as a manufacturer or Distributor?
  • In which cases an STP Broker would not have the capacity of a Manufacturer?
  • What is the objective of product governance requirements?
  • Which are the main principles of Product Governance?
  • What is Product oversight and governance?
  • Overview of product governance obligations

Section 2: Summary of the Product Approval & Review Process (PARP)

Section 3: The legal Framework

  • Regulation – Summary

Section 4: General principles of product governance

  • Overview of Product Manufacturing requirements
  • Policy
  • Governance, roles and responsibilities
  • Compliance function
  • Oversight and training requirements
  • Proportionality
  • Relationship to rules on suitability and appropriateness

Section 5: Product Approval Process – Step by Step

  • Step 1: Determine the Need
  • Step 2: Conflicts of interest, including remuneration
  • Step 3: Target Market
  • Step 4: Organisation
  • Step 5: Product distribution
  • Step 6: Product Testing (risks)
  • Step 7: Product information
  • Step 8: Record and get approval

Section 6: Target market in wholesale markets and Charging structure

  • Application of the target market requirements to firms dealing in wholesale markets (i.e. with professional clients and eligible counterparties)
  • Charging structure of the financial instrument – costs and charges

Course Duration:

This course may take up to 5 hours to be completed. However, actual study time differs as each learner uses their own training pace.

The course is addressed to:

This course is addressed to all individuals who are involved in Investment Firms (forex, brokers, etc) such as:

  • Executive Directors, Non executive directors, Senior Managers, Compliance Officers, Risk Managers, Product Managers, Portfolio Managers, Investment Advisors, Dealers, Marketing Managers and in general employees of investment firms.
  • Internal Auditors
  • Consultants

It is also suitable to professionals pursuing CPD for the renewal of CySEC Certificate (CySEC Basic and CySEC Advance Certificate) or other relevant professional certificates in other jurisdictions.

Training Method

The course is offered fully online using a self-paced approach. The learning units consist of power point presentations. Learners may start, stop and resume their training at any time.

At the end of the course, participants take a Quiz to complete the course and earn a Certificate of Completion once the Quiz has been passed successfully.

Accreditation and CPD Recognition

The course may be accredited by regulators and other bodies for up to 5 CPD Units, that require CPD training in financial regulation.

Eligibility criteria and CPD Units are verified directly by your association or other bodies in which you hold membership.

Registration and Access

To register to this course, click on the Take this course button to pay online and receive your access instantly. If you are purchasing this course on behalf of others, please be advised that you will need to create or use their personal profile before finalizing your payment.

Access to the course is valid for 60 days.

If you wish to receive an invoice instead of paying online, please Contact us by email. Talk to us for our special Corporate Group rates.

Instructor

George Papanicolaou has more than 20-years experience in the Financial industry. He worked for several years in managerial positions as area Manager, Head of Brokerage, Compliance Officer, Anti Money Laundering Officer, General Manager and Executive Director in Cypriot Investment Firms as well as Managing Director of GP GLOBAL LTD offering consulting services and training courses to Investment Firms, focuses in Internal Audit, compliance & AML issues. He offered numerous courses/seminars both in Cyprus and abroad in Investment Firms Law as well as in Compliance & Anti Money Laundering. George Papanicolaou is also a Chairman of a Nomination Committee in a company listed in the Oslo Stock Exchange.

George Papanicolaou holds a BSc in Electronic Engineering from the University of Texas at Austin (USA), an MBA with specialization in Finance from Leicester University (UK) and a Postgraduate Certificate in the Mechanics of Risk Management from Middlesex University (UK).

He also holds an ICA International Diploma in Anti Money Laundering from the International Compliance Association and the University of Manchester, as well as an Advance and Money Laundering certificate from the Cyprus Securities and Exchange Commission for the provision of investment services/activities.

He is a Fellow of the International Compliance Association (FICA), Mentor of ICA new students, member of the Cyprus Institute of Internal Auditors and Network chair for Cyprus of the International Compliance association.

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