Common Standard for the Determination of the Target Markets for Securities
As part of the MiFID II product governance requirements, manufacturers of financial instruments have to define a target market of end clients for the products they launch. Distributors must take account of this target market when they distribute the relevant product. The latter is generally only possible in the mass retail market, if the target market for all products is determined according to uniform criteria. For this reason, the German Banking Industry Committee (GBIC), together with the German Investment Funds Association (BVI) and the Structured Securities Association (BSW) had developed a common standard for the determination of the target markets for the introduction of MiFID II.
Due to changed legal requirements, the target market concept was supplemented with information on sustainability-related objectives and factors (ESG target market concept) in December 2021. The ESG target market concept was revised again at the end of 2024, among other things, to implement new regulatory requirements.