POG - product oversight governance sustainability
Companies have to integrate the legal sustainability provisions in their Product Oversight & Governance (POG) policy. They then have to evaluate the product range accordingly and avoid selling products without sustainability characteristics to investors who want to invest sustainably.
The purpose of POG is to ensure that financial products are designed, developed and distributed in a responsible and customer-oriented manner. This includes companies tailoring products to the needs of the right target audience, and not selling unsustainable products to investors with sustainability preferences. POG contributes to transparent and responsible market forces that protect investors and promote sustainable investments.
To whom does POG apply?
- To investment firms and banks (MiFID II)
- To life insurers (IDD)
What does the AFM expect from market participants?
Listed below are the main expectations for 2025 and 2026:
• They know and check the quality and reliability of products’ sustainability-related information, also for the purpose of the suitability assessment.
• They have set up the customer journey (website, app, customer contact) according to the distribution strategy.
• They monitor the distribution of grey market products to negative target markets and assess the effectiveness of their strategy to prevent this.