On 13 November 2020, Circular 2/2020 of 28 October of the Spanish Securities Market Commission, on advertising of investment products and services (the Circular) was published in the Spanish Official Gazette.
The Circular is approved in implementation of Order EHA/1717/2010, of 11 June, on the regulation and control of advertising of investment services and products and includes various criteria that the Spanish Securities Market Commission (CNMV) has already been applying in its supervisory activities, in particular, the recent increase in advertising activities related to complex financial products.
This Circular will come into force on 13 February 2021, except for the requirement relating to the internal advertising records, described below, which will come into force six months after the publication by the Bank of Spain of the technical specifications that the records must meet.
The Circular applies to the advertising of financial instruments and structured deposits, investment services and activities, the activity of UCITS and AIF management, the activity of securitization funds managed, the crowdfunding and crowdlending services, and any other financial products or services subject to the supervision of the CNMV.
The Circular is applicable not only to Spanish and foreign financial institutions with an establishment in Spain (i.e. investment firms, credit institutions when provide investment services, management companies (UCITS and AIFMs), crowdfunding and crowdlending platforms, etc.), but also to foreign financial institutions operating in Spain under the freedom to provide services without a branch. However, foreign financial institutions operating in Spain on a cross-border basis will not be required to have the commercial communication policy and the internal records mentioned below.
The Circular specifies what is meant by advertising activity. Specifically, it is defined as any form of advertising supports, regardless of the media, and advertising formats used for their dissemination. For the first time, the Circular introduces a specific regime for advertising in audiovisual, radio or digital media and social networks.
The procedures and internal controls required for the entities to carry out advertising activities are detailed. In this regard, entities carrying out advertising activities on investment products and services must have a commercial communication policy that must be approved by the relevant management body. Likewise, entities must keep internal records, duly updated and at the disposal of the CNMV for five years, of all advertising campaigns identified by correlative order number and commercial name and with the minimum documentation contained in the Circular.
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