EBA Guidelines on product oversight and governance arrangements for retail banking products

EBA/GL/2015/18
(Consolidated version)
30 June 2026

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EBA Guidelines on product oversight and govern￾ance arrangements for retail banking products Application date O EBA Guidelines on product oversight and governance ar￾rangements for retail banking products 03.01.2017 Amended by:
A1 EBA /GL/2026/07 11.01.2027
EBA/GL/2015/18
(Consolidated version) 11.01.2027

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Contents

1. Compliance and reporting obligations 3
2. Subject matter, scope and definitions 4
3. Implementation 7
   Guideline 1: Establishment, proportionality, review and documentation 7 Guideline 2: Manufacturers’ internal control functions 8 Guideline 3: Target market 9 Guideline 4: Product testing 10 Guideline 5: Product monitoring 10 Guideline 6: Remedial action 10 Guideline 7: Distribution channels 10 Guideline 8: Information for distributors 11 Guideline 9: Establishment, proportionality, review and documentation 12 Guideline 10: Distributors’ governance 12 Guideline 11: Knowledge of the target market 12 Guideline 12: Information and support for the manufacturer’s arrangements 13

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1. Compliance and reporting obligations
   Status of these guidelines

2. This document contains guidelines issued pursuant to Article 16 of Regulation (EU) No
   1093/20101
   . In accordance with Article 16(3) of Regulation (EU) No 1093/2010, compe￾tent authorities and financial institutions must make every effort to comply with the guidelines.

3. Guidelines set the EBA view of appropriate supervisory practices within the European
   System of Financial Supervision or of how Union law should be applied in a particular area. Competent authorities as defined in Article 4(2) of Regulation (EU) No 1093/2010 to whom guidelines apply should comply by incorporating them into their practices as appropriate (e.g. by amending their legal framework or their supervisory processes), in￾cluding where guidelines are directed primarily at institutions. Reporting requirements

4. According to Article 16(3) of Regulation (EU) No 1093/2010, competent authorities must
   notify the EBA as to whether they comply or intend to comply with these guidelines, or otherwise with reasons for non-compliance, within 2 months from the publication of the translations of the guidelines in all EU languages on the EBA website. In the absence of any notification by this deadline, competent authorities will be considered by the EBA to be non-compliant. Notifications should be sent by submitting the form available on the EBA website to compliance@eba.europa.eu with the reference ‘EBA/GL/2015/18’. Noti￾fications should be submitted by persons with appropriate authority to report compli￾ance on behalf of their competent authorities. Any change in the status of compliance must also be reported to EBA.

5. Notifications will be published on the EBA website, in line with Article 16(3).
   1 Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Com￾mission Decision 2009/78/EC, (OJ L 331, 15.12.2010, p.12)

6. Subject matter, scope and definitions
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   Subject matter

7. These Guidelines deal with the establishment of product oversight and governance ar￾rangements for both manufacturers and distributors as an integral part of the general
   organisational requirements linked to internal control systems of firms. They refer to in￾ternal processes, functions, and strategies aimed at designing products bringing them to the market and reviewing them over their life cycle. They establish procedures relevant for ensuring the interests, objectives and characteristics of the target market are met. Those product oversight and governance arrangements should also be established by manufacturers and distributors for products with Environmental, Social and Governance (ESG) features, should they offer and sell those products to consumers. However, these Guidelines do not deal with the suitability of products for individual consumers. O Scope of application

8. These Guidelines apply to manufacturers and distributors of products offered and sold
   to consumers and specify product oversight and governance arrangements in relation to:
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• Article 74(1) of Directive 2013/36/EU (“Capital Requirements Directive, (CRD)”), Ar￾ticle 10(4) of Directive 2007/64/EC (the “Payment Services Directive, (PSD)”), and
  Article 3(1) of Directive 2009/110/EC (the “E-Money Directive, (EMD)”) in conjunc￾tion with Article 10(4) of the PSD; and
• Article 7(1) of Directive 2014/17/EU (the “Directive on credit agreements for con￾sumers relating to residential immovable property, or Mortgage Credit Directive,
  (MCD)”).
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• Article 32 (1) of Directive 2023/2225 (the “Directive on credit agreements for con￾sumers and repealing Directive 2008/48/EC (CCD)”).’ Directive as transposed in the
  respective Member States.
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7. Competent authorities may wish to consider applying these Guidelines to other products
   or other entities in their jurisdictions that do not fall within the scope of the legislative acts referred to above but for which the competent authorities have supervisory respon￾sibilities.

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8. Competent authorities may wish to consider extending the same protections set out in
these Guidelines in relation to persons other than consumers such as micro-enterprises and small and medium-sized enterprises (SMEs). A1
9. These Guidelines supplement other EBA guidelines that may be relevant to product over￾sight and governance, in particular, the EBA Guidelines on Internal Governance under
Article 74 of the CRD. These Guidelines should also be read in conjunction with the EBA
Guidelines on the sound management of third-party risk regarding non-ICT services2 and the EBA Guidelines on management of ESG risks3 for the financial institutions in their respective scope of application. O
10. These Guidelines apply to all products brought to the market after the implementation
date of the Guidelines as well as to all existing products on the market that are signifi￾cantly changed after the implementation date of these Guidelines. Competent authori￾ties may wish to consider applying relevant Guidelines, such as Guidelines 5 and 6, to products that were brought to the market before the implementation date of the Guide￾lines. Addressees
11. These Guidelines are addressed to competent authorities as defined in Article 4(2) of
Regulation (EU) No 1093/2010 and to financial institutions as defined in Article 4(1) of Regulation (EU) No 1093/2010 (the “EBA Regulation”).

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12. With regard to the Guidelines for distributors, competent authorities should either re￾quire distributors directly to comply with them or require manufacturers under their su￾pervision to ensure that distributors comply with them.
Definitions
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13. Unless otherwise specified, terms used and defined in the legislative acts referred to in
the scope of application have the same meaning in these Guidelines. In addition, for the purposes of these Guidelines, the following definitions apply:
2 EBA Guidelines on the sound management of third-party risk regarding non-ICT services 3 EBA/GL/2025/01: : Final Guidelines on the management of ESG risks.pdf

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Manufacturer
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An undertaking that designs (i.e. creates, develops, combines, or significantly changes) products to be offered to consumers and which is any of the following:
a) a credit institution as defined in point (1) of Article 4(1) of the CRR; b) a creditor as defined in Article 4(2) of the MCD; c) a payment institution as defined in Article 4(4) of the PSD; or d) an electronic money institution as defined in Article 2(1) of the EMD, e) a creditor as defined in Article 3 point (2) of the CCD or which would otherwise be a distributor but which is involved de facto in the design of the product. Target market The group or groups of end consumers for whom the product is designed, as defined by the manufacturer. Distributor A person who offers and/or sells the product to consumers; this in￾cludes business units of manufacturers that are not involved in the de￾signing the product but are responsible for bringing the product to the market. Consumer A natural person, who is acting for purposes which are outside his trade, business or profession. Product

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O a) ‘credit agreements’ as defined in Article 4(3) MCD and Article 3(3) of the CCD; b) ‘deposits’ as defined in Article 2(3) of Directive 2014/49/EU (“Deposit Guarantee Scheme Directive, (DGSD)“)4 ; c) ‘payment accounts’ as defined in Article 4(14) PSD; d) ‘payment services’ as defined in Article 4(3) PSD; e) ‘payment instruments' as defined in Article 4(23) PSD; f) other means of payment, as listed in Annex 1(5) CRD (e.g. travellers’ cheques and bankers’ drafts); g) ‘electronic money’ as defined in Article 2(2) EMD; 4 Deposits include all forms of deposits. Directive 2014/65/EU (the Markets for Financial Instruments Directive, (MiFID2)) has extended, in line with its Article 1(4), certain organisational and conduct of business rules to the subset of deposits called structured deposits, as defined in point (43) of Article 4(1) of MiFID 2. MiFID 2 product governance rules, including future delegated acts setting further specifications in relation to Article 16(3) and Article 24(2) of MiFID2, will apply to structured deposits as of 3 January 2017 and therefore these Guidelines will not apply in relation to them.

h) other forms of credit for consumers, in addition to that included in (a), provided by the manufacturers listed above, in line with
Article 1(5)(e) of the EBA Regulation.
Management body An institution's body or bodies, which are appointed in accordance with national law, which are empowered to set the institution's strategy, objectives and overall direction, and which oversee and monitor management decision-making, and include the persons who effectively direct the business of the institution, as defined, for example, in Article 3(7) CRD. Senior management Those natural persons who exercise executive functions within an in￾stitution and who are responsible, and accountable to the manage￾ment body, for the day-to-day management of the institution, as de￾fined, for example, in Article 3(9) of CRD.
3. Implementation
Date of application
These Guidelines apply from 3 January 2017.
4. Product oversight and governance
arrangements for manufacturers
Guideline 1: Establishment, proportionality, review and docu￾mentation
1.1 The manufacturer should establish, implement and review effective product oversight
and governance arrangements. The arrangements should aim, when products are being designed and brought to the market, (i) to ensure that the interests, objectives and char￾acteristics of consumers are taken into account, (ii) to avoid potential consumer detri￾ment and (iii) to minimise conflicts of interest.
1.2 The product oversight and governance arrangement should be reviewed and updated by
the manufacturer on a regular basis.

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1.3 When launching a new product the manufacturer should ensure that the product over￾sight and governance arrangements are considered in the new product approval policy
(NPAP) in line with the EBA Guidelines on Internal Governance under Article 74 of the CRD in cases where they apply.
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1.4 All actions taken by the manufacturer in relation to the product oversight and govern￾ance arrangements should be duly documented; kept for audit purposes and made avail￾able to the competent authorities upon request.
1.5 Product oversight and governance arrangements should be proportionate to the nature,
scale and complexity of the relevant business of the manufacturer. The implementa￾tion/application of the arrangements should have regard to the level of potential risk for the consumer and complexity of the product. Guideline 2: Manufacturers’ internal control functions

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2.1 The manufacturer should ensure that product oversight and governance arrangements
are an integral part of its governance arrangements, including the internal control frame￾work as referred to in the EBA Guidelines on Internal Governance under Article 74 of the CRD, where applicable. To that end, the manufacturer’s management body should en￾dorse the establishment of the arrangements and subsequent reviews. 2.1a The manufacturer’s management body should put in place sound processes to identify, and prevent greenwashing practices and to manage and monitor risks resulting from greenwashing or perceived greenwashing practices, as also set out in the existing green￾washing-risk related requirements in the EBA Guidelines on the Management of ESG risks, where products with ESG features are offered or sold to consumers. O
2.2 Senior management, with support from representatives of the manufacturer’s compli￾ance and risk management functions, should be responsible for continued internal com￾pliance with the product oversight and governance arrangements. They should periodi￾cally check that the product oversight and governance arrangements are still appropri￾ate and continue to meet the objectives as set out in Guideline 1.1 above, and should
propose to the management body that the arrangements be amended if this is no longer the case.

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2.3 The responsibilities for the oversight of this process by the Risk Management function and
the Compliance function should be integrated into their perimeter and normal line of du￾ties as outlined in the EBA Guidelines on Internal Governance under Article 74 of the CRD, where applicable.
2.4 Senior management should ensure that staff involved in designing a product are familiar
with and follow the manufacturer’s product oversight and governance arrangement; are competent and appropriately trained; and understand and are familiar with the product’s features, characteristics and risks, including, where applicable, those related to products with ESG features.

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Guideline 3: Target market
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3.1 Manufacturers should include, in their product oversight and governance arrangements,
steps and features, including, where applicable, ESG features, that need to be followed, to identify, and update when necessary, the relevant target market of a product.
3.2 The manufacturer should, having first identified the target market, ensure that the prod￾uct, including, where applicable, the product with ESG features, is deemed appropriate
for the interests, objectives and characteristics of the identified target market(s).
3.3 The manufacturer should only design and bring to the market products with features,
including, where applicable, products with ESG features, charges and risks, that meet the interests, objectives and characteristics of, and are of benefit to, the particular target market identified for the product.

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3.4 The manufacturer should consider how the product fits within the manufacturer’s exist￾ing product range and whether the presence of too many product variants prevents the
consumer from making informed decisions.
3.5 The manufacturer should also identify the market segments for which the product is con￾sidered not likely to meet their interests, objectives and characteristics.
3.6 When deciding whether or not a product meets the interests, objectives and character￾istics of a particular target market, the manufacturer should assess the degree of financial
capability of the target market.

Guideline 4: Product testing
4.1 Before a product is brought to the market; an existing product is sold to a new target
market; or significant change is made to an existing product, the manufacturer should conduct product testing, in order to be able to assess how the product would affect its consumers under a wide range of scenarios, including stressed scenarios. Manufacturers should make appropriate product changes where the scenario analysis gives rise to poor results for the target market. Guideline 5: Product monitoring
5. Once the product is brought to market, the manufacturer is ultimately responsible for
product monitoring and should monitor the product on an ongoing basis to ensure that the interests, objectives and characteristics of consumers continue to be appropriately taken into account. Guideline 6: Remedial action
6.1 If the manufacturer identifies a problem related to the product in the market, or when
monitoring the performance of the product as required in Guideline 5.1 above, the man￾ufacturer should take the necessary action to mitigate the situation and prevent a re￾occurrence of detriment.
6.2 The remedial action should include promptly notifying the distributor of changes or mod￾ifications to the existing products and any additional actions that need to be taken to
remedy the situation.
Guideline 7: Distribution channels
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7.1 The manufacturer should select distribution channels that are appropriate for the partic￾ular target market. To that end, the manufacturer should select distributors that have
the appropriate knowledge, expertise and capability to correctly place each product in the market and to provide appropriate information explaining the characteristics and risks of the product to the consumers, including, where applicable, those related to the product with ESG features. When selecting its distribution channels, the manufacturer may consider limiting the distribution of a specific product to channels that offer specific features to consumers. O
7.2 The manufacturer should monitor that the products are distributed to the identified tar￾get market and sold outside the target market only on a justified basis.

7.3 The manufacturer should take all reasonable steps to ensure that distributors act in com￾pliance with the objectives of the manufacturer’s product oversight and governance ar￾rangements. The manufacturer should take appropriate action when concerns about the
appropriateness of a distribution channel are raised, for example by ceasing to use the particular channel for a particular product. In particular, the manufacturer should ensure, on an ongoing basis that the products reach mainly the particular intended target market through the distribution channels used. Guideline 8: Information for distributors
8.1 Where relevant, the manufacturer should provide the distributor with a description of
the main characteristics of the product; its risks and any limitations; and the total price of the product (as known, or reasonably expected to be known by the manufacturer) to be borne by the consumer, including all related fees, charges, and expenses.
8.2 The information and details of the products to be provided to distributors should be of
an adequate standard, clear, precise and up to date.
8.3 The manufacturer should ensure that the information given to the distributor includes
all relevant details to enable them:
a) to understand and place the product properly on the market, and b) to recognise the target market for which the product is designed (see Guideline 3.1), and also to recognise market segments whose objectives, interests and characteristics are considered likely not to be met (see Guideline 3.5). A1 c) where applicable, namely for product with ESG features, to ensure that sustain￾ability related communication is fair, clear, and not misleading, and that sus￾tainability claims are accurate, substantiated, up to date, provide a fair repre￾sentation of the institution’s overall profile or the profile of the product, and are presented in an understandable manner, as also set out in the greenwash￾ing-risk related requirements in the EBA Guidelines on the management of ESG risks

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5. Product oversight and governance ar￾rangements for distributors
Guideline 9: Establishment, proportionality, review and docu￾mentation
9.1 The distributor should establish, implement and review effective product oversight and
governance arrangements which are specific and proportionate to its size and to its role of bringing products to the market. The arrangements should be designed to ensure that, when bringing products to the market, the interests, objectives and characteristics of consumers are appropriately taken into account; to avoid potential consumer detriment; and to minimise conflicts of interest.
9.2 The distributorshould review and update the product oversight and governance arrange￾ments on a regular basis.
9.3 All actions taken by the distributor in relation to the product oversight and governance
arrangements should be duly documented, kept for audit purposes and made available to the competent authority, or the manufacturer, upon request. Guideline 10: Distributors’ governance
10.1 The distributor should ensure that product oversight and governance arrangements are
an integral part of its general systems and controls. To that end, the management body, if relevant, should endorse their establishment and subsequent reviews. Guideline 11: Knowledge of the target market
11.1 The distributor should use the information provided by the manufacturer and have rele￾vant knowledge and the ability to determine whether a consumer belongs to the target
market. The distributor should in particular take due account of all relevant information allowing it to recognise the target market for which the product is designed, and also to recognise market segments for which the product is considered likely not to meet their interests, objectives and characteristics.

Guideline 12: Information and support for the manufac￾turer’s arrangements A1
12.1 The distributor should take into account the information provided by the manufacturer
and disclose to the consumer, including, where applicable, for the product with ESG fea￾tures, a description of the main characteristics of the product, its risks, and the total price of the product to be paid by the consumer, including all related fees, charges, and ex￾penses, as well as providing additional material supplied by the manufacturer to be used by the target market. 12.1a The distributor should, for products with ESG features offered and sold, ensure that sus￾tainability related communication is fair, clear, and not misleading, and that sustainability claims are accurate, substantiated, up to date, provide a fair representation of the insti￾tution’s overall profile or the profile of the product, and are presented in an understand￾able manner, as also set out in existing the greenwashing-risk related requirements in the EBA Guidelines on the management of ESG risks. O
12.2 The distributor should sell the product to a consumer who does not belong to the target
market only on a justified basis. The distributor should also be able to provide information to justify to the manufacturer why it offered a product to a consumer who does not belong to the target market.
12.3 In order to assist the manufacturers in their obligation of product monitoring, the distrib￾utor should collect information to permit the manufacturer to decide whether the prod￾uct the distributor brings to the market meets the interests, objectives and characteristics
of the target market on an ongoing basis.
12.4 If the distributor identifies any problems regarding the product features, product infor￾mation or the target market when offering and selling products, the distributor should
promptly inform the manufacturer of the issue.