The recent iteration of the Markets in Financial Instruments Directive (MiFID II) is set to take investor protection to a completely new level. The introduction of product governance rules – a main innovation under the next generation of MiFID – will impose radical changes to the way conflicts of interests with investors are managed. The new rules ensure that funds complying with MiFID II prioritize investors’ interests throughout the entire lifecycle of their products and services, both at inception and on an ongoing basis thereafter. See “MiFID II Expands MiFID I and Imposes Reporting Requirements on Asset Managers, Including Non-E.U. Asset Managers” (May 28, 2015). The European Securities and Markets Authority recently issued a consultation paper providing draft guidelines for the product governance requirements that clearly articulate how they strengthen investor protections. In a guest article, Attilio Veneziano, founder of consulting firm Veneziano & Partners, details the new MiFID II product governance rules and their interplay with existing directive rules; how firms can use the consultation paper guidelines to comply with the rules; and how the rules address the threat of regulatory arbitrage going forward. For additional insight from Veneziano, see “Broadening the Scope of MiFIR Intervention Powers: ESMA Demands Direct Supervisory Authority to Limit ‘Top-Up’ Management Activities and Reduce Regulatory Arbitrage” (Jun. 1, 2017).