The Bank of Spain approves new rules on advertising of banking products and services

On 15 July 2020, Circular 4/2020 of 26 June of the Bank of Spain, on advertising of banking products and services (the Circular) was published in the Spanish Official Gazette.

The Circular aims to adapt to the evolution of the advertising sector and the impact of digital technology, and further develops the changes introduced by the Order ECE/482/2019, of 26 April, that amends the Order EHA/1718/2010, of 11 June, of regulation and control of advertising of banking services and products (please also see our previous FinBrief post about the publication of the Order ECE/482/2019 here).

This Circular will come into force on 15 October 2020, 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 is applicable not only to financial institutions with an establishment in Spain, but also to entities operating in Spain under the freedom to provide services without a branch. However, entities providing services on a cross-border basis will not be required to have the commercial communication policy and the internal records mentioned below.

The Circular develops the Order EHA/1718/2010 and further 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 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 Bank of Spain, of all advertising campaigns identified by correlative order number and commercial name and with the minimum documentation contained in the Circular.

Entities, when advertising for the first time banking products and services in Spanish territory, will communicate this to the Bank of Spain within one month from the day following the start of the advertising activity. This requirement, unlike the rest of the Circular, will apply from 16 July 2020.