On 27 May 2024, the European Securities and Markets Authority (ESMA) published a combined report on its 2023 Common Supervisory Action (CSA) and the accompanying Mystery Shopping Exercise (MSE) on marketing disclosure rules under MiFID II.

The findings set out in ESMA’s report include:

  • Globally, marketing communications (including advertisements) comply with MiFID II requirements.
  • Investment firms generally have procedures in place to ensure marketing materials comply with MiFID II, including during their development.
  • National competent authorities (NCAs) raised some concerns regarding sustainability claims in marketing communications, including advertisements.

The report also identifies several areas for improvement, including:

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

ESMA encourages NCAs to consider the use of sanctions in the case of breaches. It confirms that it will continue to work with NCAs on the topic, given the substantial role that marketing communications and advertisements can play in determining consumer behaviour and influencing investment decisions.