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To explain the practices that ESMA (European Securities and Markets Authority) recommends for investment firms and national competent authorities to implement when it comes to structured retail products (SRPs), in order to ensure sound product governance arrangements and the consistency of supervisory practices needed for adequate investor protection across the European Union.

Lists the ESMA guidelines for the general organization of product governance arrangements, breaks down the aspects manufacturers should consider in the making of their SRPs, highlights the need to understand the target market, explains the appropriate structure of the distributor’s and manufacturer’s distribution strategy, details how manufacturers establish a SRP’s value, recommends how investment firms deal with SRPs on the secondary market, and explains how manufacturers review the performance of their SRPs.

The competent authorities are still focusing on improving and enforcing investor protection. This ESMA opinion is just one example of how product governance structures and arrangements should be developed and implemented by everyone involved. It will be important to attend carefully to what MiFID 2 (Markets in Financial Instruments Directive 2) product governance requirements bring regarding investor protection in addition to the described ESMA opinion, which is based on MiFID 1.

Practical guidance from experienced finance lawyers.

To discuss the new UCITS V Directive, recently agreed upon by the European Parliament and Council, which will include safeguards to protect client assets in the event of a depositary’s insolvency and also address remuneration practices that are thought to encourage excessive risk-taking.

Summarizes UCITS-V, discusses whether the new remuneration rules are sound, addresses the concern that the UCITS V remuneration restrictions could make it difficult for USA-affiliated advisers and managers to manage UCITS, summarizes next steps and further procedures.

From an institutional point of view, deferred remuneration systems will require credit institutions, as well as investment firms and custodians, to ensure sound and sustainable business models that also protect the public. This will be accomplished in part by establishing incentives and compliance systems that foster a risk-aware approach and an awareness by employees that they will profit only if the fund investors or the relevant credit institutions do. UCITS offering materials will need to be evaluated to see if current advisory structures can be maintained while retaining the desired business profile of the fund.

Practical explanation by experienced lawyers.

The development in the German-speaking countries of International Management (IM) as an academic discipline is analyzed both from a research-oriented and an institutional standpoint. This development is characterized by a relatively long run-up after early beginnings in the 1920s and a steep jump during the past 15–20 years. Business Administration and Strategic Management rather than Economics have influenced the IM field which is now an established subject in its own right. The resulting discipline is well on its way to overcoming an alleged “black hole-image” of international isolation on the part of German-speaking countries’ scholars.