ESMA reports on the application of MiFID II marketing requirements

ESMA, together with the National Competent Authorities (NCAs), finds that globally, marketing communications (including advertisements) comply with MiFID II requirements, and investment firms generally have procedures in place to ensure compliance with MiFID II of marketing materials, including during their development. Some concerns were raised by NCAs regarding sustainability claims in marketing communications, including advertisements.

In the report, ESMA identifies several areas of improvements, such as the need for marketing communications to be clearly identifiable as such, and to contain a clear and balanced presentation of risks and benefits. In cases where products and services are marketed as having 'zero cost', they should also include references to any additional fees.

Other areas for improvement include:

1. The need for adequate approval and review processes for marketing communications, including advertisements, whether these are prepared by the firm or by third parties;
2. Ensuring compliance with legal requirements on the part of distributors for all marketing communications;
3. Implementation of adequate record-keeping measures for all marketing material including social media posts;
4. Involvement of control functions and senior management in internal processes and procedures related to development, design, and oversight of marketing materials

Next steps

NCAs are encouraged to consider the use of sanctions in case of breaches.

ESMA and the NCAs will continue working on the topic given the substantial role that marketing communications and advertisements can play in determining consumer behaviour and influencing investment decisions.

Further information:

Sarah Edwards

Senior Communications Officer
@ [email protected]