EU markets watchdog to scrutinise online product sales, use of ‘influencers’

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LONDON, Jan 16 (Reuters) – The European Union’s markets watchdog said on Monday it will review how banks, insurers and investment firms sell products, particularly when using “influencers” in social media and making climate-friendly claims.

The European Securities and Markets Authority (ESMA) said it will study whether advertisements and other marketing materials are “fair, clear and non-misleading”.

“ESMA is also aware that younger, less experienced investors, are particularly vulnerable when they operate online,” the watchdog said in a statement.

The review will closely consider marketing and advertising by firms through distribution channels including apps, websites, social media, and collaborations with affiliates such as influencers.

The review, undertaken during this year in conjunction with national market watchdogs in EU member states, will also collect information about possible ‘greenwashing practices’ where firms exaggerate the climate-friendly credentials of their products.

The aim is to see if firms are complying with disclosure requirements under the bloc’s “MiFID” securities rules. Regulators have powers to sanction breaches of those rules.

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