EMSA and NCAs to look at marketing of financial products    

Launch of the 2023 CSA

25 January 2023

On 16 January 2023, the European Securities and Markets Authority (‘ESMA’), the EU’s financial markets regulator and supervisor, issued a notification statement (the ‘Statement’) on the launch of a common supervisory action (the ‘CSA’) with national competent authorities (the ‘NCAs’) on the application of MiFID II disclosure rules with regards to marketing communications across the EU. The CSA will be taking place during 2023.

Acknowledging the pivotal role that marketing communications and advertisements may play in determining consumer behaviour and influencing investment decisions, ESMA in conjunction with the NCAs will, through this CSA, seek to assess how investment firms and credit institutions providing investment services activities (the ‘In-scope Parties’) apply the MiFID II requirements with respect to marketing communications.

As part of the CSA, all participating NCAs will evaluate whether marketing communications (including advertisements) irrespective of their distribution channel (be it through ‘traditional’ distribution channels such as the radio and/or television or through applications, websites, social media and collaborations with affiliates) are fair, clear and non-misleading as well as the manner in which the In-scope Parties select their target audience for the marketing communications, particularly with respect to online operations and risky and complex investment products.

The CSA initiative will also facilitate the collection of information which should put NCAs in a position to assess the extent to which ‘greenwashing practices’ have made their way into marketing communications and advertisements.

Moreover, the CSA and the related sharing of practices across NCAs is viewed by ESMA as an opportunity to enhance the protection of investors in line with its objectives and which should ensure consistent application and implementation of EU rules and promote supervisory convergence throughout the EU.

Locally, the CSA will form part of the Malta Financial Services Authority’s (the ‘MFSA’) supervisory priorities for 2023. The Conduct Supervision Function (the ‘CSF’) within the MFSA will be reaching out to selected In-scope Parties so as to carry out the relevant inspections on the application of MiFID II disclosure rules on marketing communications.

Deloitte Malta will be closely monitoring developments in the furtherance and implementation of the 2023 CSA, both locally and overseas.

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