Common minimum standard for identifying target markets
The ESG Target Market Concept was revised at the end of 2024, in part, to take account of new regulatory requirements.
Under MiFID II product governance requirements, manufacturers of financial instruments must specify an identified target market for the products they sell to clients. The distributors must also take this target market into account when distributing the products. The latter is only possible for mass retail financial services if the target market for all products is determined according to standardised criteria. This is why the associations of the German Banking Industry Committee (GBIC) together with the German Investment Funds Association (BVI) and the Structured Securities Association (BSW) agreed a common minimum standard for identifying target markets to comply with MiFID II (Target Market Concept).
The Target Market Concept was amended in December 2021 due to new legal requirements and information concerning sustainability-related goals and sustainability factors (ESG Target Market Concept). The ESG Target Market Concept was revised again at the end of 2024, in part, to take account of new regulatory requirements. This is the latest version (dated 13 December 2024) of the ESG Target Market Concept.
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