In response to new legislation for investment services (MiFID 2), the Dutch Authority for the Financial Markets (AFM) sent a letter to the sector expressing its expectation that investment advertisements would be reviewed based on the new legislation. An investment firm wanted to know how it could ensure that it met the regulator’s expectations.
First, the process of creating investment advertisements was analysed. It soon became apparent that the advertising rules were not clear enough to everyone. Therefore, an advertising policy was drawn up with examples of client communications that are allowed/not allowed and of ‘best practices’. Arrangements were also made with the departments involved for dividing work and mutual responsibilities. Lastly, internal training sessions were held on the new advertising policy.
By reviewing the entire process for creating investment advertisements, it was possible to arrive at an integrated approach. Everyone now has clarity about what is expected of him/her and what legal frameworks apply. As a result, the quality of investment advertising has improved across the board, while the investment firm has greater control over compliance with advertising legislation.