Advertising Regulations And Oversight For Banking Products And Services

1 July 2010

Order EHA/1718/2010 of June 11th is passed. This order establishes the rules, principles and criteria to which advertising for banking services and products should be subject and authorizes Spain’s central bank to implement the order.

The order is based on the principle of consumer protection, which implies that the investor should have access to truthful information on which to base their banking decisions.

The fact that the banks are assuming a series of risks, both legal and reputational, through their advertising campaigns has been taken into account. As they are expected to adequately manage these risks, supervisors are granted the authority to verify that they have the mechanisms in place to do so.

In order to provide equal treatment for the advertising of an array of financial products, to have a system similar to that of general advertising for products and services, and to minimize the risks for banks, the current system of prior authorization is replaced with a system of oversight for advertising based on two elements: a preventive aspect, through the development of specific criteria for financial advertising to provide guidelines for clarity and honesty and the requirement of internal controls and procedures which tend to favour same; and another aspect which allows for the correction of any inappropriate conduct. In the latter case, the Spanish central bank can order the withdrawal or rectification of advertising which does not comply with that set forth in this order.

For further information please contact Belén Arribas: barribas@mmmm.es