This document presents the EBA guidelines on governance and oversight of retail banking products. It defines compliance and reporting obligations for competent authorities and financial institutions. The guidelines aim to establish appropriate supervisory practices within the European financial system.
This document is the consolidated version of the EBA-GL-2015-18 guidelines issued by the European Banking Authority (EBA) in 2026, with an update scheduled for 11 January 2027. It is a 13-page guide concerning the monitoring and governance arrangements of retail banking products, notably those with environmental, social, and governance (ESG) features. The scope covers manufacturers and distributors of financial products intended for consumers in the European Union, including loans, deposits, payment services, electronic money, and related products, according to several European directives (CRD, PSD, EMD, MCD, CCD). The document applies to products launched after 3 January 2017 and to those significantly modified after this date (p. 1-7).
The EBA-GL-2015-18 guide aims to regulate the monitoring and governance arrangements of retail banking products to protect consumers and ensure regulatory compliance within the European Union. It is essential as it sets best practices for the design, marketing, and monitoring of financial products, notably integrating risks related to products with ESG features, and combating greenwashing. The main findings are that manufacturers and distributors must establish processes proportionate to the nature and complexity of products, including precise identification of the target market, product testing before market launch, continuous monitoring, and rapid corrective actions in case of issues. Distributors must ensure thorough knowledge of the target market and provide consumers with clear and up-to-date information. Key recommendations include integrating arrangements into internal governance, rigorous documentation of actions, appropriate selection of distribution channels, and close cooperation between manufacturers and distributors to ensure products meet consumer needs. These guidelines apply to all new or significantly modified products since 2017, with a compliance obligation for competent authorities and financial institutions (p. 1-13).
This document was drafted to harmonize governance and monitoring practices of retail banking products in the European Union, in response to the requirements of Regulation (EU) No 1093/2010. The objective is to ensure that financial products offered to consumers are designed, distributed, and monitored in a way that protects their interests, avoids conflicts of interest, and prevents harm. The guide specifies the responsibilities of manufacturers and distributors, emphasizing consideration of target market characteristics and risk management, including those related to ESG products and greenwashing. The scope is limited to products covered by the mentioned European directives, without addressing the individual suitability of products for each consumer (p. 3-6).
1. Establishment and governance of arrangements: Manufacturers must implement effective arrangements proportionate to the size, complexity, and risks of products, integrated into their internal governance and regularly controlled. Documentation of actions is mandatory (p. 7-8).
2. Identification of the target market: Each product must be designed for one or more clearly defined consumer segments, considering their interests, objectives, characteristics, and financial capacities. Products must be adapted to these markets, and non-targeted segments identified (p. 9).
3. Product testing and monitoring: Before marketing or significant modification, tests must be conducted to assess impact on consumers, including stress scenarios. Continuous monitoring is required to detect any issues and take rapid corrective measures (p. 10).
4. Selection and control of distribution channels: Manufacturers must choose competent distributors, capable of correctly placing products on the market and informing consumers, notably about risks and features, including ESG. Distribution outside the target market must be justified and monitored (p. 10-11).
5. Information and support to distributors: Manufacturers must provide distributors with clear, precise, up-to-date information, including risks, total costs, and product limitations, as well as instructions to identify the target market and avoid greenwashing in ESG communications. Distributors must relay this information to consumers and inform manufacturers in case of problems (p. 11-13).
Findings:
- The guidelines are mandatory for competent authorities and strongly recommended for financial institutions (p. 3).
- They cover a wide range of financial products intended for consumers in the EU (p. 4-7).
- Manufacturers and distributors must formalize, document, and regularly review their governance arrangements (p. 7-8, 12).
Assumptions:
- The proportionality of arrangements must reflect the complexity and risk of products (p. 7).
- In-depth knowledge of the target market helps limit risks of consumer harm (p. 9, 11).
Interpretations:
- Integration of ESG requirements and prevention of greenwashing are growing priorities (p. 8-9, 11, 13).
- Cooperation between manufacturers and distributors is essential to ensure compliance and consumer protection (p. 11-13).
Uncertainties:
- Application of the guidelines to other products or entities outside the legal scope remains at the discretion of competent authorities (p. 5-6).
- The effectiveness of measures will depend on the rigor of their implementation and control by authorities (p. 3).
The EBA recommends that manufacturers and distributors of retail banking products adopt robust, proportionate monitoring and governance arrangements integrated into their internal governance to ensure consumer protection and regulatory compliance. Manufacturers must clearly identify the target market, test products before market launch, ensure continuous monitoring, and take rapid corrective measures in case of issues. Distributors must be selected for their competence, use information provided by manufacturers to correctly target consumers, and promptly inform manufacturers of any detected problems. Particular attention must be paid to products with ESG features to avoid greenwashing, in accordance with specific guidelines on ESG risk management. These measures must be documented and made available to competent authorities. Compliance is mandatory from 3 January 2017, with an update scheduled for 11 January 2027 (p. 1-13).
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