ESMA launches supervisory action regarding marketing of financial products

Rick Steves

ESMA believes this initiative and the related sharing of practices across NCAs, will help ensure consistent implementation and application of EU rules and enhance the protection of investors in line with ESMA’s objectives.

The European Securities and Markets Authority (ESMA) has launched a common supervisory action with national competent authorities on the application of MiFID II disclosure rules with regard to marketing communications across the European Union.

The supervisory action will be conducted over the course of 2023, said the EU’s financial markets regulator which is aware of the key role that marketing communications and advertisements can play in determining consumer behavior and influencing investment decisions.

For that reason, the financial watchdog will assess the application by investment firms and credit institutions of the MiFID II requirements on marketing communications.

Are brokers’ ads fair, clear, and non-misleading?

National competent authorities will review whether marketing communications – including advertisements – are fair, clear, and non-misleading and how firms select the target audience for the marketing communications, especially in the case of riskier and more complex investment products.

Because younger, less experienced investors, are particularly vulnerable when they operate online, the supervisory action will also closely consider marketing and advertising by firms through distribution channels including apps, websites, social media and collaborations with affiliates such as influencers.

ESMA’s supervisory action of 2023 will also collect information about possible ‘greenwashing practices’ observed in marketing communications and advertisements.

ESMA believes this initiative and the related sharing of practices across NCAs, will help ensure consistent implementation and application of EU rules and enhance the protection of investors in line with ESMA’s objectives.

The CSA contributes to fulfilling ESMA’s mandate on building a common supervisory culture among NCAs to promote sound, efficient, and consistent supervision throughout the EU. ESMA’s promotion of supervisory convergence is done in close cooperation with NCAs

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