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We are looking for people who aim to go further and face the future with confidence.
The Portuguese Securities Market Commission (CMVM) has published some clarifications on the regulatory framework for “finfluencers”, i.e. influencers who use their social media accounts, websites or podcasts to share content on financial topics (including investments) or to promote financial products and services, potentially influencing investment decisions with their opinions, information or recommendations. Raquel Azevedo, in the Banking and Finance and Capital Markets practices, Rita Almeida, senior consultant from the same team, and Miguel André Martins, have prepared some notes to help understand the CMVM communication.
This communication identifies the main issues that should be considered by financial intermediaries themselves and when they use finfluencers, to ensure that the content shared complies with applicable legislation.
Key points:
Financial literacy content: The mere distribution of this content does not constitute a regulated and supervised activity. However, the CMVM warns that certain content may be subject to CMVM supervision. This requires a case-by-case analysis to ensure that the distribution does not contain general investment recommendations or personalised advice. The use of disclaimers alone is not sufficient for content to be considered mere information within the scope of financial literacy.
Advertising and customer acquisition: Advertising and customer acquisitionfor financial intermediation activities are reserved exclusively for financial intermediaries or tied agents. Therefore, it is essential that financial intermediaries are clearly identified as advertisers when they resort to finfluencers. To this end, the CMVM provides a set of indicators to verify the finfluencer's actions and qualify the financial intermediary as an advertiser, as well as the controls to be implemented by financial intermediaries to monitor the distribution of advertising content by finfluencers. Regarding prospecting, the CMVM warns about the defined contractual model and the necessary prior communication to the CMVM
Investment consultancy:The provision of personalised advice on securities or other financial instruments to an actual or potential investor, at the latter's request or on the initiative of the financial intermediary, may only be carried out by entities authorised and registered with the CMVM.
Investment recommendations: Investment recommendations may be issued by financial intermediaries or by persons carrying out financial analysis activities and notified to the CMVM in accordance with Annex I of CMVM Regulation No. 2/2007. The provisions of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 (“MAR”) and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 (“Delegated Regulation”) should also be taken into account. It is recommended to consult the European Securities and Markets Authority's (“ESMA”) warning to persons posting investment recommendations on social media, dated 6 February 2014.